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Roth IRA vs. Traditional IRA Calculator
Compare post-tax vs. pre-tax growth. Find out which account maximizes your take-home retirement wealth.
IRA Assumptions and Tax Brackets
After-Tax Spendable Wealth
Recommended Winner
Roth IRA
Yields more spendable wealth in retirement
Roth IRA (100% Tax-Free)
$1,234,500
Zero tax owed at withdrawal
Traditional IRA (After-Tax)
$962,910
After paying 22% income tax
Net Spendable Advantage
+$271,590
Extra money in your pocket
Roth IRA vs Traditional IRA: Which is Better?
The fundamental distinction between a Roth IRA and a Traditional IRA comes down to when you pay income taxes:
Roth IRA: Pay Tax Now, Tax-Free Forever
You contribute with money that has already been taxed today. In exchange, all future investment capital gains, dividends, and retirement withdrawals are 100% tax-free. Additionally, Roth IRAs have no Required Minimum Distributions (RMDs) during the owner's lifetime.
Traditional IRA: Tax Break Now, Pay Tax in Retirement
Contributions are generally tax-deductible in the year you make them, which lowers your taxable income today. However, every penny withdrawn during retirement is taxed as ordinary income at whatever tax rate you are subject to at that time.
The General Rule of Thumb
- Choose Roth IRA if: You expect your tax bracket in retirement to be the same or higher than it is today (very common for younger workers and early-career professionals).
- Choose Traditional IRA/401(k) if: You are in your peak earning years in a high federal/state tax bracket (e.g., 32%–37%) and expect to live on substantially less in retirement.