Roth vs Traditional IRA
Compare after-tax retirement outcomes based on your tax brackets, age, and expected returns.
Roth invests $5,460 a year after 22% tax. Traditional invests the full $7,000. 2026 limits: $7,500 IRA, $24,500 401(k).
Tax bracket today
Tax bracket in retirement
After-tax money at 65 (35 years of contributions)
Roth
$808K
Tax paid now, withdrawals tax-free
Traditional
$911K
$1.0M before 12% withdrawal tax
Traditional comes out $104K ahead
Today's bracket (22%) is higher than your retirement bracket (12%), so taking the deduction now and paying the lower rate later leaves more money in your pocket. The bracket gap decides the winner. Time and returns make the gap bigger in dollars.
Assumes the same pre-tax dollars go in every year at the start of the year, federal brackets only. If you would max out the account either way, Roth shelters more after-tax money, which tilts the result toward Roth. Estimates for education, not tax advice.
Ready to Start Building?
Track your retirement accounts and total net worth in one place.
Start Growing Your Net WorthWhen Roth Wins
Roth wins when your tax rate in retirement will be higher than it is now. This is common for young professionals early in their careers, people who expect significant income growth, and anyone who believes tax rates will rise nationally. With a Roth, you pay taxes on contributions now but never pay taxes on growth or withdrawals.
When Traditional Wins
Traditional wins when your current tax rate is higher than what you'll pay in retirement. This often applies to high earners in peak years who plan to retire with lower income, or people in states with high income tax who plan to retire in a tax-free state.
The Roth Conversion Ladder
An advanced strategy for early retirees: contribute to Traditional during high-earning years (getting the deduction at a high rate), then convert to Roth during low-income retirement years (paying taxes at a low rate). The converted funds become available tax-free after 5 years. This requires planning ahead but can save tens of thousands in lifetime taxes.