Roth vs Traditional IRA Calculator
Finance & InvestmentCompare Roth IRA vs Traditional IRA after-tax value at retirement using 2025 tax rules. Instantly see which account leaves more in your pocket.
Roth IRA
Tax-free at withdrawal
$0
Traditional IRA
22% tax at withdrawal
$0
Tax rates are equal — Roth has higher after-tax value due to tax-free withdrawals. Consider your future rate outlook.
What is a Roth vs IRA?
A Roth vs Traditional IRA calculator compares the after-tax retirement wealth you would accumulate in each account type based on your specific situation — your current age, expected retirement age, contribution amount, current tax rate, and the tax rate you expect to pay in retirement. Rather than giving generic rules, it models your actual numbers so you can see which account type leaves more money in your pocket when you retire.
Individual Retirement Accounts (IRAs) are one of the most powerful tax-advantaged vehicles available to American savers. The fundamental difference between the two types is when you pay taxes. A Traditional IRA gives you a tax deduction on contributions today — your investment grows tax-deferred, but every withdrawal in retirement is taxed as ordinary income. A Roth IRA flips this: you contribute after-tax dollars now, but qualified withdrawals in retirement (including all growth) are completely tax-free.
Both accounts grow at the same compounded rate. The question is purely about tax timing: do you want to pay taxes at your current marginal rate, or at your future retirement rate? If your current rate is higher, Traditional wins. If your retirement rate is higher (or equal), Roth wins — because tax-free compounding over decades is more valuable than a deduction today.
For 2025, the IRS allows contributions of up to $7,000 per year ($8,000 if you are 50 or older) across all your IRAs combined. Roth IRA eligibility phases out between $150,000 and $165,000 MAGI for single filers, and $236,000 to $246,000 for married filing jointly. Traditional IRA deductibility has its own phase-out range if you are covered by a workplace plan.
To plan the rest of your retirement picture, see the Social Security Benefits Estimator for your likely monthly income from Social Security, and the 401(k) Calculator for your workplace retirement account projections.
How to use this Roth vs IRA calculator
Set your Current Age — enter your age today using the slider. The younger you are, the longer the compounding period, and the more significant the tax-free benefit becomes.
Set your Retirement Age — the default is 65. Adjust this if you plan to retire early (FIRE) or plan to work into your late 60s. Every additional year extends the compounding period and widths the Roth's tax-free advantage.
Enter your Annual Contribution — the 2025 maximum is $7,000 ($8,000 if you are 50+). If you cannot max out, enter your realistic annual amount. Even $3,000 per year makes a dramatic difference over a 35-year career.
Set your Current Tax Rate — enter your current federal marginal tax bracket. This is the rate on your last dollar of income: 10%, 12%, 22%, 24%, 32%, 35%, or 37% for 2025. Do not use your effective (average) rate — the marginal rate is what matters for the deduction comparison.
Set your Retirement Tax Rate — estimate the federal marginal rate you expect to pay when you begin withdrawing. This is harder to predict but is the most important variable. Consider your expected Social Security income, pension, RMDs, and other income sources. If uncertain, run the calculator at two or three different retirement rates to see the range of outcomes.
Set Expected Annual Return — 7% is a historically reasonable long-term real return for a diversified equity portfolio. Conservative investors might use 5–6%; aggressive investors might use 8–9%. Adjust this to reflect your actual investment allocation.
Enter your Current IRA Balance — if you already have funds in a Roth or Traditional IRA, enter that balance here. The calculator assumes both accounts start at this balance and grow together, keeping the comparison apples-to-apples.
Read the comparison panel — the tool highlights the account with the higher after-tax value. The recommendation text explains the reasoning based on your tax rate inputs, so you have a one-sentence summary to share with your financial advisor.
Formula & Methodology
Both the Roth IRA and Traditional IRA are projected using the same compound growth formula: Balance at retirement: B = B₀ × (1 + r/12)^(n×12) + (C/12) × ((1 + r/12)^(n×12) − 1) / (r/12) Where: - B₀ = current IRA balance ($) - r = expected annual return rate (decimal, e.g. 0.07 for 7%) - n = years to retirement (retirement age − current age) - C = annual contribution ($) - r/12 = monthly growth rate After-tax values: Roth After-Tax Value = B (no tax on withdrawal) Traditional After-Tax Value = B × (1 − t_r) Where t_r = expected retirement marginal tax rate (decimal) Annual Traditional tax deduction: Tax savings = C × t_c Where t_c = current marginal tax rate (decimal) Worked example: Suppose you are age 30, plan to retire at 65 (35 years), contribute $7,000 per year, expect 7% annual return, are in the 22% tax bracket now, and expect to be in the 22% bracket in retirement, with no existing balance. Monthly rate = (1.07)^(1/12) − 1 = 0.5654% Balance at 65 = ($7,000/12) × ((1.005654)^420 − 1) / 0.005654 ≈ $998,000 Roth after-tax value: $998,000 (full balance, no tax) Traditional after-tax value: $998,000 × (1 − 0.22) = $778,440 Annual Traditional tax deduction: $7,000 × 22% = $1,540/year Roth tax-free benefit: $998,000 − $778,440 = $219,560 In this equal-rate scenario, the Roth delivers $219,560 more in spendable retirement wealth. The Traditional account provides $1,540 per year in immediate tax savings, but those savings would need to be consistently reinvested and compound at the same rate to close the gap. Key assumption: The calculator assumes the same dollar contribution goes into both accounts. In practice, a Traditional IRA contribution is "worth more" because the government effectively subsidizes it through the deduction. A fully equivalent comparison would fund the Roth with a smaller after-tax contribution that matches the Traditional's out-of-pocket cost. The side-by-side shown here is the standard industry comparison and is most useful for evaluating the tax-rate break-even point.
Frequently Asked Questions