Traditional IRA Calculator · Practical guide
Traditional IRA vs Roth IRA: Which Is Better?
Expect a lower tax bracket in retirement? Traditional usually wins. Higher? Roth usually wins. The math is symmetric.
At a glance
The One Question That Decides It
A traditional IRA gives you a tax deduction now and taxes withdrawals later; a Roth IRA taxes contributions now and makes qualified withdrawals completely tax-free. If your tax rate today is higher than it will be in retirement, the traditional IRA wins; if it's lower, the Roth wins; if the rates are equal, the two are mathematically identical.
Interactive tool
Traditional IRA Calculator
Enter your own values, then compare the result with the examples below.
Traditional IRA Analysis
The Math with Real Numbers
Contribute $6,500 a year for 35 years at a 7% return. In a traditional IRA the balance grows to $898,539.71 before tax:
| Scenario | Tax Now | Tax at Withdrawal | After-Tax Value |
|---|---|---|---|
| Traditional: 22% now, 12% in retirement | $0 on contributions | $107,825 | $790,715 |
| Traditional: 22% now, 22% in retirement | $0 on contributions | $197,679 | $700,861 |
| Roth: 22% now, any rate later | $1,430 per year | $0 | $700,861 |
Notice the last two rows are identical to the dollar — with equal tax rates, paying 22% now on each contribution or 22% later on the whole balance produces the same spendable money. The traditional IRA only pulls ahead when the retirement rate drops, beating the Roth by about $89,854 at a 12% retirement rate.
Factors Beyond the Tax Math
- RMDs: Traditional IRAs force required minimum distributions starting at age 73 (rising to 75 under current law). Roth IRAs have no lifetime RMDs for the original owner.
- Income limits: High earners may be ineligible to contribute directly to a Roth or to deduct traditional contributions if covered by a workplace plan.
- Flexibility: Roth contributions (not earnings) can be withdrawn anytime without penalty, making the Roth a stealth emergency fund.
- Future rates are unknowable: Many savers hedge by holding both account types.
Model Your Side of the Comparison
The calculator above quantifies the traditional half of the decision: enter your current and expected retirement tax rates to see your deduction savings now, the tax due at withdrawal, and your after-tax balance. If the retirement rate you enter is lower than your current rate, the traditional structure is working in your favor — and the results show by exactly how much.
Frequently Asked Questions
Can I contribute to both a traditional and a Roth IRA?
Yes, but the IRS annual limit applies to your combined contributions across both account types. Many people split their contribution between them as a hedge against future tax-rate uncertainty.
What if tax rates rise for everyone by the time I retire?
That argues for the Roth, since you'd lock in today's rates. Nobody can predict future legislation, which is why diversifying across both account types is a common strategy.
Is a 401(k) traditional or Roth?
It can be either — many employers now offer both options, and the same tax-rate logic applies. A traditional 401(k) also lowers your taxable income today through payroll deferral.
Does a Roth IRA really grow tax-free?
Yes. Qualified withdrawals — generally after age 59½ and once the account has been open five years — owe zero federal income tax, regardless of how much the account has grown.