CalculatorPro Tools

How to Use the Roth vs Traditional IRA Comparison Tool

Choosing between a Roth IRA and a Traditional IRA depends on your specific financial situation. This tool lets you compare both side by side using your own numbers so you can see the exact after-tax difference at retirement.

Step-by-Step Instructions

  1. 1 Enter your current age and the age you plan to retire. The difference determines how many years your contributions will grow.
  2. 2 Input your annual IRA contribution amount. For 2026, the limit is $7,500 if you are under 50, or $8,600 if you are 50 or older.
  3. 3 Enter your current marginal tax rate. This is the rate you pay on your highest dollar of income, found on your most recent tax return. This rate determines the Traditional IRA tax deduction you receive today.
  4. 4 Estimate your expected tax rate in retirement. If you expect lower income in retirement, this rate will be lower than your current rate (favoring Traditional). If you expect higher income, this rate will be higher (favoring Roth).
  5. 5 Set your expected annual return rate. A 7% return is a common conservative estimate for a diversified portfolio. You can adjust this based on your investment strategy.
  6. 6 If you already have money in an IRA, enter your current balance. Otherwise leave this at zero. Click Compare to see side-by-side results for both account types.

Understanding the Inputs

Your Current Age

Your current age sets the starting point for your retirement savings timeline. The difference between this age and your retirement age determines exactly how many years your IRA contributions will grow through the power of compound returns. Starting earlier means more years of tax-advantaged growth, which can dramatically increase your ending balance even if you contribute the same amount each year. For example, someone who starts saving in their 20s gets 35-45 years of growth, compared with just 10-15 years for someone starting in their 50s. Even a few extra years of growth can translate into hundreds of thousands of additional dollars at retirement.

How to find it: Your current age is your age in years as of today. If you are comparing for a couple, you can run the calculation twice using each person's age, or use the younger spouse's age for a more conservative estimate of how long the joint retirement savings will need to last.

Why it matters: Age is the single largest lever on your retirement outcome because compound growth requires time to work. A longer timeline dramatically favors the Roth IRA because decades of tax-free growth generate significantly more after-tax wealth. With a short timeline (under 10 years), the difference between Roth and Traditional narrows because there is less time for tax-free compounding to overcome the upfront tax cost of Roth contributions.

Type: number · Default: 30

Retirement Age

Retirement age is the age at which you plan to stop working full-time and begin drawing on your retirement savings. This age defines the endpoint of your investment horizon and is used alongside your current age to calculate the total number of years your money will grow. Your retirement age also affects how long your savings need to last in retirement, which can influence whether you prioritize maximum account growth or tax diversification across account types.

How to find it: The standard retirement age in the United States is 65, which aligns with Medicare eligibility. Full Social Security retirement age ranges from 66 to 67 depending on your birth year. Many people retire between 60 and 70. If you plan to work longer or retire early, adjust this number accordingly. For a conservative estimate, use a retirement age of 60 to account for the possibility of an earlier-than-planned retirement.

Why it matters: A later retirement age means more years for your investments to compound, which increases the tax-free growth advantage of a Roth IRA. However, it also means fewer years of retirement to draw down the savings, which can shift the breakeven calculation. If you plan to retire early, the Traditional IRA may be more attractive because you can do Roth conversions in the low-income years before you start Social Security and before Required Minimum Distributions begin.

Type: number · Default: 65

Annual Contribution

Annual contribution is the amount you plan to contribute to your IRA each year. The IRS sets annual limits on IRA contributions that adjust for inflation. For 2026, the limit is $7,500 if you are under 50 years old and $8,600 if you are 50 or older. This is the total combined limit across all of your IRAs; you cannot contribute more than this amount to a Roth IRA and Traditional IRA in the same year. If you have both types, the sum of your contributions to both accounts cannot exceed this annual limit.

How to find it: Check your budget and determine how much you can consistently save for retirement each year. If you are just starting out, aim to contribute at least enough to get any employer matching in your 401(k) before funding an IRA. The maximum annual contribution is a good target if you can afford it, but any amount above zero makes a meaningful difference over time. You can find the current year's IRA contribution limits on the IRS website.

Why it matters: The amount you contribute each year directly determines the size of your nest egg at retirement. Higher contributions amplify the difference between Roth and Traditional because more money is subject to the tax treatment difference. With a Roth IRA, every dollar you contribute is already taxed, so all future growth is tax-free. With a Traditional IRA, every dollar you contribute reduces your taxable income today, but the entire withdrawal amount (including all growth) is taxed as ordinary income in retirement. The larger your contributions, the more this tax timing difference matters.

Type: number · Default: 7000

Current IRA Balance

Current IRA balance is the total amount you already have saved in your IRA. This includes all prior contributions, rollovers from previous employer plans, and accumulated investment earnings. If you are just starting to save for retirement, this value will be zero. If you have been saving for several years or have consolidated old 401(k) accounts into an IRA, your current balance may be substantial. This balance continues to grow alongside your new contributions, and its future value depends on your expected rate of return and the number of years until retirement.

How to find it: Your current IRA balance is shown on your most recent account statement from your IRA custodian (such as Vanguard, Fidelity, Schwab, or any other brokerage or mutual fund company). You can also check your account online. If you have multiple IRAs, add the balances together. If you have both a Roth IRA and a Traditional IRA, enter only the balance of the account type you are currently evaluating, or use the total combined balance if you are comparing the overall impact.

Why it matters: Your existing IRA balance already benefits from compound growth and continues to grow alongside new contributions. A larger starting balance gives the Roth IRA a bigger advantage over time because more money grows and is ultimately withdrawn tax-free. For the Traditional IRA, a larger starting balance means more money will be subject to ordinary income tax on withdrawal, which could push you into a higher tax bracket in retirement and reduce the net benefit.

Type: number · Default: 0

Expected Annual Return (%)

Expected annual return rate is the average annual percentage return you expect your IRA investments to earn over the entire investment horizon until retirement. This is not a guaranteed rate of return but rather a long-term average expectation. For a diversified portfolio of stocks and bonds, historical average returns have ranged from 6 percent to 10 percent annually depending on the asset allocation. Using a conservative estimate reduces the risk of overestimating your retirement savings and making decisions based on overly optimistic projections.

How to find it: If you invest in a target date fund, the fund prospectus typically states its long-term return assumption, which is usually between 5 percent and 8 percent. Financial planners commonly use 7 percent as a conservative long-term average for a balanced portfolio of roughly 60 percent stocks and 40 percent bonds. For an aggressive stock-heavy portfolio, you might use 8 to 10 percent. For a conservative portfolio heavy in bonds and cash, use 4 to 5 percent.

Why it matters: The expected return rate has an exponential effect on your ending balance because of compound growth over decades. A difference of just 1 percentage point can change your retirement balance by hundreds of thousands of dollars over a 30-year horizon. Importantly, the return rate affects both Roth and Traditional IRAs equally in terms of pre-tax growth. The Roth advantage from tax-free withdrawals becomes more valuable at higher return rates because more of your ending balance consists of investment earnings rather than contributions, and those earnings are withdrawn tax-free from a Roth.

Type: number · Default: 7

Current Marginal Tax Rate (%)

Current marginal tax rate is the tax rate you pay on your highest dollar of income. This is the rate at which your Traditional IRA contribution reduces your tax bill. When you contribute to a Traditional IRA, the contribution amount is deducted from your taxable income, saving you money at your marginal tax rate. For example, if your marginal tax rate is 24 percent and you contribute $7,500 to a Traditional IRA, you save $1,800 on your tax bill for that year. If you instead contribute to a Roth IRA, you pay tax on that income now and receive no upfront deduction.

How to find it: Your marginal tax rate depends on your taxable income and filing status. The 2026 federal income tax brackets are: 10 percent (income up to $11,925 for single filers), 12 percent ($11,925 to $48,475), 22 percent ($48,475 to $103,350), 24 percent ($103,350 to $197,300), 32 percent ($197,300 to $250,525), 35 percent ($250,525 to $626,350), and 37 percent (over $626,350). Find your taxable income from your most recent tax return and identify the bracket your top dollars fall into. State income tax is not included in this calculator, so you may want to increase your rate slightly if you live in a state with income tax.

Why it matters: Your current tax rate is the cost of choosing a Roth IRA and the benefit of choosing a Traditional IRA. A high current tax rate makes Traditional IRA contributions more attractive because you get a larger immediate tax deduction. A low current tax rate makes Roth contributions more attractive because you lock in a low tax rate on your contributions and all future growth is tax-free. This is the central trade-off in the Roth versus Traditional decision.

Type: number · Default: 24

Expected Retirement Tax Rate (%)

Expected retirement tax rate is the marginal tax rate you expect to pay on your retirement withdrawals. For a Traditional IRA, withdrawals are taxed as ordinary income, so your tax rate in retirement directly determines how much of your Traditional IRA balance you actually get to keep. For a Roth IRA, qualified withdrawals are completely tax-free regardless of your tax rate in retirement, which is why the Roth advantage grows when you expect higher future tax rates.

How to find it: Estimating your future tax rate requires some assumptions about your retirement income. Consider your expected Social Security benefits, any pension income, withdrawals from tax-deferred accounts, and any part-time work income in retirement. If you expect your total retirement income to be lower than your current income, your retirement tax rate will likely be lower. If you expect similar or higher income in retirement, your retirement tax rate may be similar to or higher than your current rate. A common rule of thumb is to assume your retirement tax rate will be 10 to 15 percent if you expect a moderate retirement income.

Why it matters: The retirement tax rate is the deciding factor in the Roth versus Traditional calculation. If your retirement tax rate is lower than your current rate, the Traditional IRA produces more after-tax wealth because you saved at a higher rate today and pay tax at a lower rate later. If your retirement tax rate is higher than your current rate, the Roth IRA wins because you paid tax at todays lower rate and all future growth is tax-free. When both rates are equal, the after-tax result is identical for both account types, and the decision comes down to other factors such as Required Minimum Distributions and estate planning.

Type: number · Default: 15

Tips & Best Practices

  • ✓ The break-even point is when your current tax rate equals your retirement tax rate. At that point both accounts produce identical after-tax wealth.
  • ✓ If you are early in your career (20s or 30s), Roth IRA often wins because your income and tax rate will likely rise over time.
  • ✓ If you are in your peak earning years, Traditional IRA often wins because your retirement income and tax rate will likely be lower.
  • ✓ You can contribute to both a Roth and Traditional IRA in the same year as long as your total combined contributions do not exceed the annual limit of $7,500 ($8,600 if 50+). This strategy provides tax diversification in retirement.
  • ✓ Roth IRAs have no Required Minimum Distributions (RMDs) during your lifetime, unlike Traditional IRAs which require mandatory withdrawals starting at age 73 under SECURE Act 2.0.
  • ✓ If your income exceeds Roth IRA limits ($153,000 single / $242,000 married filing jointly for 2026), the Backdoor Roth strategy lets you contribute to a Traditional IRA and convert it to a Roth.
  • ✓ For the fairest comparison, reinvest the Traditional IRA tax savings in a taxable brokerage account. Our calculator models this by showing the net spendable amount.

Try the Roth vs Traditional IRA

by CalculatorPro Tools · Updated 2026-07-29