IRA Calculator (Traditional vs Roth)
Compare traditional and Roth IRAs after tax, using your own tax rates.
The question: tax now or tax later?
A traditional IRA gives you a tax deduction now, and you pay income tax on withdrawals. A Roth IRA gives you no deduction now, but withdrawals are tax-free. So the comparison comes down to your tax rate today against your expected rate in retirement.
What the numbers show
If the two rates are equal, the accounts finish level. If your rate is lower in retirement, the traditional IRA wins. If it is higher, the Roth wins. For example, setting aside $7,500 at 6% for 25 years with rates of 24% now and 22% later gives about $25,100 after tax from the traditional IRA, against about $24,500 from the Roth, so the traditional IRA is ahead by roughly $640 because the tax rate falls.
Other things matter too: Roth money has no required minimum distributions, and traditional withdrawals can raise your taxable income, which may affect benefits. This is general information, not tax advice.
Frequently asked questions
Which is better for young people?
Because early-career incomes are often lower, a Roth is a common choice, but it depends on your own rates and future plans.
Do I need to use both?
Many people split savings between both for flexibility in retirement.
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