Roth vs. Traditional 401(k)/IRA Calculator — Which Is Better?

Both accounts grow at the same rate, but the tax treatment differs:

Roth: Pay taxes on contributions now → grow tax-free → withdraw completely tax-free Traditional: Deduct contributions now → grow tax-deferred → pay taxes on every withdrawal

The economic comparison is only valid when you account for the upfront tax savings of Traditional. The calculator normalizes both options to the same after-tax cost:

Roth:        contribute $C after-tax → withdraw C × FV (no tax)
Traditional: contribute $C/(1−t_current) pre-tax (same after-tax cost)
             → withdraw [C/(1−t_current)] × FV × (1−t_retire)
             = C × FV × (1−t_retire)/(1−t_current)

The break-even rule:

• Traditional wins when: (1−t_retire)/(1−t_current) > 1 → when t_retire < t_current
• Roth wins when: (1−t_retire)/(1−t_current) < 1 → when t_retire > t_current
• Equal when rates are identical

Secondary factors that often favor Roth:

• No RMDs = better estate planning
• Tax-free withdrawals don't trigger Social Security taxation, IRMAA surcharges, or ACA cliff effects
• Tax diversification across account types reduces future rate risk

Use this calculator when:

• Choosing your annual contribution type — Model your specific income, expected retirement income, and years remaining to see the dollar impact of Roth vs. Traditional.
• Evaluating a Roth in-plan conversion — Many 401(k) plans allow converting Traditional balances to Roth within the plan. This calculator shows the long-term value of that conversion.
• Planning for tax bracket management — If your income varies year to year, model when Roth contributions make sense (low-income years) vs. Traditional (high-income years).
• Comparing before and after OBBBA/tax reform — If Congress changes income tax rates, the break-even calculation shifts. See how sensitive your decision is to different assumed retirement rates.
• Advising adult children or family members — Young workers in the 10% or 12% bracket almost always benefit from Roth. This calculator makes the case with concrete numbers.