Roth vs. Traditional 401(k)/IRA Calculator
Compare the real after-tax retirement value of Roth vs. Traditional contributions using your actual current and expected retirement marginal tax brackets -- not a flat rate guess.
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Additional Details
Additional Details
Better Choice for Your Numbers
Traditional wins by $58,944 after tax
Estimated • Based on your inputs
After-Tax Advantage
-$58,943.53
Traditional: After-Tax Value at Retirement
$943,096.49
Roth: After-Tax Value at Retirement (Tax-Free)
$884,152.96
Detailed Breakdown
Disclaimer: This calculator provides estimates for informational purposes only. Results should not be considered financial, tax, or legal advice. Consult a qualified professional for your specific situation.
How This Calculator Works
Calculation methodology and assumptions
This calculator sets aside the SAME dollar amount of gross income for retirement savings every year and compares what each account type delivers after tax. Traditional invests the full contribution pre-tax and pays ordinary income tax later; Roth pays the current federal tax attributable to that income first and invests the remainder tax-free. The current tax benefit is calculated as tax before the Traditional deduction minus tax after the deduction, with taxable income floored at zero. Retirement withdrawals are stacked on top of other retirement income to get a blended federal rate. Contributions are capped at the 2026 account limit and current-age catch-up rule. IRA mode assumes MAGI allows the full Roth contribution and the Traditional IRA contribution is fully deductible; it does not model the separate Roth eligibility or workplace-plan Traditional deduction phaseouts. The projection also excludes state tax, Additional Medicare Tax, Social Security interactions, RMDs, and changing contribution limits/ages over time.
How to Use This Investment & Retirement Calculator
- 1
Enter your initial investment
Input the lump sum you plan to invest today. This is your starting principal that will begin compounding immediately.
- 2
Set your monthly contribution
Enter the amount you plan to add each month. Consistent contributions accelerate growth through dollar-cost averaging.
- 3
Input expected return and time horizon
Set your expected annual return (7–10% for stocks historically, 4–6% for bonds) and investment period. Longer time horizons amplify compounding effects dramatically.
- 4
Review the growth projection
The results show your total invested amount, earnings from compound growth, and a year-by-year projection table showing how your money grows over time.
Example Calculation
How does compound interest build wealth over time?
Starting with $10,000 and adding $500/month at an 8% average annual return for 30 years: Your total contributions would be $190,000 ($10K initial + $180K in monthly deposits). But with compound growth, your portfolio would grow to approximately $745,000.
Result: Compound interest generated $555,000 in earnings on top of your $190,000 in contributions — nearly 75% of the final value came from returns, not deposits. Starting 5 years later would reduce the final amount by roughly $230,000. Time in the market is the most powerful factor in wealth building.
What Affects Your Results
Rate of Return
Even small differences compound massively over time. 7% vs. 8% over 30 years on $100K means a difference of $200K+. Asset allocation drives your expected return.
Time Horizon
Compounding accelerates exponentially. Most of your wealth is generated in the final years — a 30-year investment earns more in its last 5 years than its first 15.
Contribution Consistency
Regular monthly investments (dollar-cost averaging) smooth out market volatility and ensure you're always buying — including during dips when prices are low.
Fees & Expenses
A 1% annual fee vs. 0.1% fee on a $500K portfolio costs you $4,500/year extra. Over 30 years, high fees can consume 25–30% of potential returns. Use low-cost index funds.
Tips & Best Practices
- Start early. Thanks to compounding, $200/month invested from age 25 to 65 at 8% returns grows to ~$700K. Waiting until 35 cuts that to ~$300K — a $400K penalty for the 10-year delay.
- Don't try to time the market. Research consistently shows that time in the market beats timing the market. Missing the 10 best trading days over 20 years can halve your returns.
- Consider tax-advantaged accounts first: 401(k) (especially with employer match), IRA, HSA. These reduce your tax drag — a 25% tax bracket investor keeps more in a tax-deferred account.
- Rebalance annually. If stocks outperform and grow from 80% to 90% of your portfolio, rebalancing back to 80% locks in gains and manages risk.
- Factor in your state's tax treatment of investment income. Some states exempt certain investment income or have lower rates on capital gains.
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StateCalc Team
Editorial Team
The StateCalc team builds free financial calculators using data from official government sources including the IRS, U.S. Census Bureau, BLS, and state revenue departments. All formulas are validated by an automated test suite and cross-referenced against published data.
Our editorial standardsFrequently Asked Questions
Roth or Traditional -- which is actually better?
It depends entirely on whether your marginal tax rate today is higher or lower than your effective tax rate will be in retirement. If your rate today is higher, Traditional generally wins (you get the deduction while your rate is high, and pay tax later at a lower rate). If your rate in retirement will be higher, Roth generally wins. If the two rates are equal, the after-tax result is mathematically identical -- use the calculator above with your own numbers rather than a rule of thumb.
Why does the calculator show a smaller dollar amount actually invested in the Roth account?
Because Roth contributions are made with after-tax dollars. If you set aside the same pre-tax income for both accounts, the Traditional account invests every dollar of it, while the Roth account first pays income tax on that income (at your current marginal rate) and only invests what is left. That "haircut" happens up front for Roth and at withdrawal for Traditional -- which is exactly why comparing the two options requires comparing tax rates at both points in time, not just contribution amounts.
Is it true that Roth and Traditional are the same if tax rates don’t change?
Yes -- this is a well-known result in retirement-planning math, and this calculator will show it directly: if your marginal tax rate on the contribution today exactly equals your effective tax rate on the withdrawal in retirement, the after-tax value of a Roth account and a Traditional account come out identical, because the same percentage of the original pre-tax dollars is lost to taxes either way -- just at different times.
What is the 2026 contribution limit for each account type?
For 2026, the 401(k) elective-deferral limit is $24,500 ($32,500 with the age-50 catch-up, or $35,750 with the SECURE 2.0 age 60-63 "super catch-up"). The IRA limit is $7,500 ($8,600 if 50+) -- and this limit is shared between Roth and Traditional IRA contributions combined, it is not doubled by splitting between the two.
Does this calculator account for state income tax?
No -- it only models federal marginal tax rates using the real IRS bracket schedule for your filing status. If your state taxes retirement withdrawals differently than current wages (many states exempt some retirement income), your real-world result could shift further toward whichever account benefits from that state-level treatment. Add your own adjustment if state tax is a large factor for you.
Does IRA mode check whether I can deduct a Traditional IRA contribution or contribute to a Roth IRA?
No. IRA mode assumes you qualify for the full Roth contribution and the full Traditional IRA deduction. In reality, Roth eligibility and Traditional IRA deductibility phase out at different MAGI levels, and the Traditional rules also depend on whether you or your spouse participate in a workplace retirement plan. Confirm eligibility separately before relying on the IRA comparison.
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