Roth vs. Traditional IRA Calculator: Which Is Better for You?
Opens on a 30-year-old contributing $7,000 a year until 65 at a 7% return, in the 22% bracket now and expecting 15% in retirement. Both accounts, side by side, after tax.
Roth vs. Traditional IRA Calculator
Starts on a 30-year-old contributing $7,000 a year until 65 at a 7% return, taxed at 22% today and 15% in retirement. Change any field and the comparison moves with you.
Your marginal bracket — the rate the deduction saves you.
The effective rate you expect to pay on withdrawals.
A Traditional contribution of $7,000cuts this year's tax bill by $1,540. Leave this on to put that money in a taxable brokerage account — the only way the two sides cost you the same. Turn it off if you'd spend the refund.
Roth IRA at 65
$967,658
All of it tax-free
You paid the tax on every contribution up front, so nothing is owed on the way out.
Traditional IRA at 65
$967,658
Pre-tax — $822,509 after 15% tax
Plus $189,037 in the side account the deduction funded — $1,011,546 spendable in total.
At 22% today and 15% in retirement, the Traditional leaves you $43,888 more to spend (4.5% of the Roth total).
$967,658 spendable from the Roth vs. $1,011,546 from the Traditional, on $245,000 of contributions over 35 years.
| Line item | Roth IRA | Traditional IRA |
|---|---|---|
| Into the IRA each year | $7,000 | $7,000 |
| Cash out of your pocket each yearAfter the deduction, and after the tax saving is set aside | $7,000 | $5,460+ $1,540 invested = $7,000 |
| Balance at age 65 | $967,658 | $967,658 |
| Tax owed when you withdrawAt 15% on every dollar out of the Traditional | $0 | −$145,149 |
| Taxable side account, after capital gains tax | — | $189,037 |
| Spendable total | $967,658 | $1,011,546 |
Contributions land at the end of each year and grow at a steady return; real markets do not. Both accounts are assumed fully deductible / fully eligible, taxes are federal only, and the side account is taxed once, on its gains, at the end. Not tax advice.
Your break-even retirement tax rate: 19.5%
Retire in a bracket below 19.5% and the Traditional wins; above it, the Roth does. Everything else — balance, return, contribution — cancels out.
| If your retirement tax rate is | Roth spendable | Traditional spendable | Winner |
|---|---|---|---|
| 10% | $967,658 | $1,059,929 | Traditionalby $92,271 |
| 12% | $967,658 | $1,040,576 | Traditionalby $72,918 |
| 15%your assumption | $967,658 | $1,011,546 | Traditionalby $43,888 |
| 22% | $967,658 | $943,810 | Rothby $23,848 |
| 24% | $967,658 | $924,457 | Rothby $43,201 |
| 32% | $967,658 | $847,045 | Rothby $120,614 |
Same contribution, same return, same years in both columns — only the rate you pay on withdrawals changes. The Roth column is flat because nothing is owed on it.
What the default numbers say
$7,000 a year for 35 years at 7% builds $967,658 — in either account. Same contribution, same return, same balance. Nothing about the two IRAs makes one compound faster than the other, and any article that implies otherwise is wrong.
The only thing that differs is whenthe IRS takes its cut. The Roth takes it on the way in: you contribute money you've already paid 22% on, and the $967,658 comes out tax-free. The Traditional takes it on the way out: the contributions were deductible, so at a 15% retirement rate, $145,149 of that balance belongs to the IRS and you keep $822,509.
Stop there and the Roth looks like an easy win by $145,149. It isn't, because the two columns didn't cost you the same. The Roth contribution took $7,000 of take-home pay. The Traditional took $5,460 — the deduction handed back $1,540 every year, $53,900 in total. Invest that difference in a taxable brokerage account at the same 7% and it grows to $189,037 after capital gains tax, which brings the Traditional side to $1,011,546spendable against the Roth's $967,658.
So for this person the Traditional wins by $43,888 — not because it compounds better, but because they bought their tax bill at 15% instead of 22%.
The break-even tax rate, in plain English
Here is the whole decision in one line: multiplication doesn't care what order you do it in. A dollar taxed at 22% and then grown 10.7× — what 7% over 35 years does — ends up in exactly the same place as a dollar grown 10.7× and then taxed at 22%. Both accounts shelter your growth from tax completely while it compounds. If your tax rate were identical today and in retirement, the Roth and the Traditional would produce identical spendable money, to the penny.
Which means the choice is not really about compounding, or account balances, or how many years you have. It is a bet on one thing: is your tax rate higher now or later? Everything else in the comparison cancels.
Your break-even retirement tax rate is the rate where the two land in the same place — and it is approximately your current marginal rate. In the default scenario it works out to 19.5% rather than a clean 22%, and the gap is worth understanding: the money the deduction frees up has to sit in a taxable brokerage account, where its gains get taxed at the end. That drag shaves a couple of points off. If you could shelter the side account too, the break-even would land exactly on your current rate.
Read it as a threshold. Expect to pay less than 19.5% on your withdrawals and the Traditional wins; expect more and the Roth does. The table in the calculator runs your scenario across a range of retirement rates so you can see how much the answer actually moves — and how flat it is near the break-even, where the decision genuinely does not matter much.
One warning about that toggle. If you spend the $1,540 refund instead of investing it, the Roth wins at every tax rate — but that result has nothing to do with tax policy. It just means you put more real money into the Roth. Many people do exactly that, which is a legitimate argument for the Roth as a forced-savings mechanism. It is not an argument about the tax math.
Two scenarios, run through the same calculator
When the Roth wins
25, first real job, 12% bracket
$7,000 a year to 65 at 7%, taxed at 12% today and expecting 24% in retirement — a reasonable guess for someone whose income is going up and who will have a 401(k), a pension, or Social Security filling the low brackets by then.
- Roth spendable: $1,397,446
- Traditional spendable: $1,209,638
- Break-even rate: 10.6% — well below the 24% expected
The Roth wins by $187,808. Paying tax at 12% to never pay it again is the best deal in the tax code, and it is only available while your income is low.
When the Traditional wins
45, peak earnings, 32% bracket
$7,000 a year to 65 at 7%, taxed at 32% today and expecting a 15% effective rate in retirement — plausible for a household that will live mostly off withdrawals, with the standard deduction and the low brackets doing their work.
- Roth spendable: $286,968
- Traditional spendable: $328,699
- Break-even rate: 29.5% — far above the 15% expected
The Traditional wins by $41,730. A deduction taken at 32% and repaid at 15% is a 17-point spread on every dollar, and 20 years is enough for it to matter.
Same engine, same assumptions, only the ages and the two tax rates changed. Put your own in the calculator above — the answer flips on the tax rates, not on the size of the numbers.
Four things the tax-rate math doesn't capture
RMDs force the Traditional's hand
Traditional IRAs require minimum distributions starting at age 73 under current law (75 from 2033), and every one is taxable income whether you need it or not. A Roth has none in your lifetime. Forced withdrawals are also how a “low retirement tax rate” assumption quietly breaks.
You might not get the deduction
If you or your spouse are covered by a workplace plan, the Traditional deduction phases out above income limits the IRS resets each year. No deduction means no reason to choose Traditional — you would pay tax going in and on the growth coming out. Check the current thresholds before you assume the 22% saving is yours.
Roth contributions stay reachable
Money you contributed to a Roth — not the earnings — comes back out at any age without tax or penalty. That makes a Roth a workable bridge for an early retirement, where a Traditional withdrawal before 59½ costs income tax plus a 10% penalty. See the Roth IRA calculator for the details of the 5-year rule.
You are guessing at a rate 35 years out
Nobody knows what the brackets will look like in 2060, and your own retirement income is a guess too. That uncertainty is the honest case for holding some of both: split the limit, and in retirement draw from the Traditional up to the top of a low bracket and take the rest from the Roth.
Where the IRA fits with everything else
The usual order of operations puts the 401(k) match first — an instant 50–100% return no IRA can match — then the IRA up to the $7,000 limit, then back to the 401(k) for whatever is left. The 401(k) growth calculator models the match and salary raises properly, and the same Roth-versus-pre-tax question applies there if your plan offers a Roth 401(k) — with the same break-even logic and no income limits.
Whichever side you land on, the number that matters is what the balance buys, not what it says. $967,658 in 2061 is not $967,658 in today's money — run it through the inflation-adjusted returns calculator to see the purchasing power, and size the whole target with the retirement calculator.
Related Tools & Articles
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401(k) Contribution Limit Calculator
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HSA Investment Calculator
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Inflation-Adjusted Returns
What a seven-figure balance is worth in today's money
Frequently Asked Questions
Should I do a Roth or a Traditional IRA?
Compare one rate against one rate: your marginal tax rate today against the effective rate you expect to pay on withdrawals in retirement. Higher later means Roth; higher now means Traditional. Everything else — how much you contribute, what return you earn, how many years you have — cancels out of the comparison, because both accounts grow on the same untaxed compounding. In practice: early-career earners in the 10%, 12%, or 22% brackets usually want the Roth, and peak-earnings households in the 32% bracket and up usually want the deduction. If the two rates look about equal, it is close to a coin flip on the math, and the tiebreakers are the Roth's lack of RMDs and the flexibility of being able to pull contributions back out.
What is the break-even tax rate between a Roth and a Traditional IRA?
It is roughly your current marginal tax rate. On the default scenario — 22% today, $7,000 a year from 30 to 65 at 7% — the break-even retirement rate is 19.5%. Retire paying less than that and the Traditional wins; more and the Roth wins. The break-even lands slightly below your current 22% rather than exactly on it because the money the deduction frees up has to live in a taxable brokerage account, where its gains eventually get taxed. If that side account were tax-free, the break-even would be exactly your current rate — that is the underlying math.
Is $7,000 in a Roth the same as $7,000 in a Traditional IRA?
No, and this is the single most common mistake in the comparison. In the 22% bracket, $7,000 into a Traditional costs you $5,460 of take-home pay, because the contribution is deductible and cuts your tax bill by $1,540. The same $7,000 into a Roth costs the full $7,000 — it is after-tax money. So a Roth contribution at the limit is quietly a larger contribution. Any comparison that ignores the $1,540 makes the Roth look better than it is, which is why the calculator above invests that difference in a taxable account by default. Turn the toggle off and you will see the Roth win at every tax rate — that result is about contributing more money, not about tax rates.
Can I contribute to both a Roth and a Traditional IRA in the same year?
Yes, but the 2026 limit of $7,000 (or $8,000 at age 50 and up) is the total across all your IRAs, not per account. You could put $3,500 in each. Splitting is a reasonable hedge if you genuinely cannot tell which side of the break-even you will land on, and it gives you two pots to draw from in retirement — you can take Traditional withdrawals up to the top of a low bracket and cover the rest of your spending from the Roth tax-free.
What if I earn too much to deduct a Traditional IRA contribution?
If you or your spouse are covered by a workplace retirement plan, the Traditional IRA deduction phases out above certain income levels — check the current thresholds on IRS.gov, as they are adjusted every year. Above the top of that range the contribution is still allowed but is non-deductible, which removes the entire point of choosing Traditional: you would pay tax on the money going in and again on the growth coming out. At that income level the usual move is a Roth, or a backdoor Roth if you are also over the Roth income limit.
Do Traditional IRAs have required minimum distributions?
Yes. Under current law you must start taking RMDs from a Traditional IRA at age 73 (rising to 75 in 2033), whether you need the money or not, and each withdrawal is taxable income. Roth IRAs have no RMDs during the original owner's lifetime, so the balance can keep compounding untouched and pass to heirs intact. If you expect to have other income sources in your 70s, forced Traditional withdrawals can push you into a higher bracket than you planned for — which is exactly the risk of assuming a low retirement tax rate.
Which IRA is better if I want to retire early?
The Roth has a real edge before 59½. Your contributions — not earnings — can be withdrawn at any age, tax-free and penalty-free, which makes a Roth a usable bridge for the first years of an early retirement. Pulling from a Traditional IRA early means income tax plus a 10% penalty unless you use a specific exception. Early retirees often do the opposite of the standard advice on purpose: they take the Traditional deduction during high-earning years, then convert to Roth in the low-income years after they stop working, paying the tax at a bracket of their own choosing.
Does this calculator include state taxes?
No — every rate on this page is federal. State income tax generally works in the same direction and can widen the gap significantly if you expect to retire in a different state than the one you are earning in. Earning in a high-tax state and retiring in a no-income-tax one strengthens the Traditional case; the reverse strengthens the Roth. Add your state's marginal rate to the two tax-rate fields above to see it, and remember that a handful of states exempt retirement income entirely.