Roth vs. Traditional Calculator

A traditional account lets you save before tax and pay tax when you withdraw. A Roth account takes money that's already been taxed, and qualified withdrawals, including the growth, are tax-free.¹ The calculator follows the same amount of pay through both and shows what you'd have to spend at the end.

What decides it

Set the tax rate now and later to the same number, and the two come out equal. Roth comes out ahead when your rate later is higher than now; traditional comes out ahead when it's lower. Everything else, the return and the number of years, scales both equally. So the real question is what your tax rate will be when you withdraw compared with today, which nobody knows for certain.

What it leaves out

• Contribution limits, income limits for Roth IRAs, and employer matches, which follow their own rules.
• Roth accounts have no required minimum distributions while the owner is alive; traditional accounts do.²
• State taxes, and the fact that many people's withdrawals are taxed at more than one rate.