Roth vs Traditional Calculator

A traditional contribution reduces your taxable income at the top of your earnings, so the tax it saves is priced at your marginal bracket, the rate on the last dollar you earn. A traditional withdrawal, by contrast, is new taxable income that starts filling your tax table from zero: it first uses up the standard deduction, taxed at zero, then the lowest bracket, then the next one, and so on. Unless your planned withdrawal is very large, most of it lands in the lower bands, so the effective rate, total tax divided by the withdrawal, sits well below the marginal rate you saved when you contributed. This gap is the reason a flat-rate comparison, one guessed retirement tax rate applied to both sides, is structurally biased toward Roth.

Equal take-home, this calculator's default, compares the two branches after making sure each one costs you the same amount of spendable pay today: the traditional branch's tax saving is invested in a separate taxable account so its true cost matches the Roth branch's after-tax contribution. Equal contribution, the frame most flat-rate calculators use without saying so, has both branches contribute the identical dollar amount and stops there, which quietly lets the Roth branch cost more take-home pay than the traditional one, since an after-tax dollar is more expensive than a pre-tax one. That hidden cost difference is why the equal contribution frame favors Roth by construction, not because Roth is actually the better account for your numbers. The calculator offers both, labeled, so you can see the naive frame's bias for yourself.

Starting in 2026, SECURE 2.0 requires that catch-up contributions to a 401(k)-type plan by a participant aged 50 or older be made as Roth contributions if that person's prior-year FICA wages from the plan's sponsoring employer exceeded 150,000 USD, the 2026 threshold under section 414(v)(7)(A). Below that wage level, or for the base contribution under the regular limit, the Roth-versus-traditional choice stays entirely yours. The rule tests actual wages from one employer in the prior year, a figure this calculator does not collect, so its note is a reminder to check your own pay stub, never a hard block on what you enter here.

No. A traditional 401(k) contribution is excluded from federal taxable income, but it is still counted as wages for Social Security and Medicare tax (FICA), exactly like a Roth contribution. Payroll tax is identical in both branches, so it plays no role in which one leaves you better off; the entire decision comes down to the federal (and any state) income tax comparison this calculator runs.

A Roth 401(k) or Roth IRA withdrawal is qualified, and so entirely free of federal income tax, once the account has been open at least five years and the withdrawal happens at or after age 59 and a half, on death or disability, or under a small set of other exceptions. This calculator assumes every Roth withdrawal in its projection is qualified, which is the realistic case for a retirement-horizon plan; an early or non-qualified withdrawal can trigger tax and a 10 percent penalty on the earnings portion, outside what this tool models.

It models federal income tax only, using the standard deduction; itemizers, and anyone in a state or locality with its own income tax, need to add their own numbers in the two state-rate fields, since there is no 50-state table here by design. Head of household filing status is not offered; approximate it with the single-filer setting and your own figures. Required minimum distributions, which force taxable withdrawals from traditional accounts from a certain age while Roth accounts never require them, are not modeled, nor is the effect withdrawals have on how much of Social Security counts as taxable income or on Medicare IRMAA surcharges. IRA deduction and Roth IRA income phase-outs appear only as warnings, never as modeled math. Finally, the whole comparison holds today's federal tax law constant in real terms for decades; a future Congress could change it, which is exactly why splitting savings between a Roth and a traditional account is a reasonable hedge even when today's math favors one of them.