IRA vs Roth IRA Calculator
Compare Traditional IRA vs Roth IRA side-by-side using your current and expected retirement tax brackets. After-tax retirement balance both ways. Free.
IRA vs Roth IRA Calculator
Compares Traditional IRA (pre-tax contribution, taxed withdrawal) vs Roth IRA (post-tax contribution, tax-free withdrawal) over the same investment horizon. Includes the "what if you invest the upfront tax savings" credit for Traditional — the apples-to-apples comparison most online calculators skip.
How to Use the IRA Comparison
Use your current marginal tax bracket
NOT your effective rate. Marginal = the bracket the next dollar of income falls into. US 2026 federal brackets: 10%, 12%, 22%, 24%, 32%, 35%, 37%. Add your state marginal rate if applicable (CA: 9.3%, NY: 6.85%, TX/FL/WA: 0%).
Estimate your retirement tax rate
If you expect lower retirement income (most people): pick a lower bracket. If you expect equal/higher (long career growth, pension + Social Security stacking, second-career income): pick equal/higher. Default 22% covers most middle-income retirees.
Read the verdict bar first
Tells you which wins and by how much. If the two are within USD 5,000 over 30 years, the choice is effectively a tie and other factors (tax-rate uncertainty, RMD avoidance, estate planning) become the tiebreakers.
Consider tax diversification
Many planners recommend splitting contributions — fund Traditional in high-income years for the deduction, Roth in lower-income years for the tax-free space. Having both at retirement gives you control over yearly taxable income.
Traditional vs Roth — The Tax-Bracket Crossover Math
The Underlying Identity
The Traditional-vs-Roth decision is mathematically a single question: will your marginal tax rate be higher now or in retirement? If lower now, Roth wins. If higher now, Traditional wins. If equal, they're identical — the order of operations (tax now vs tax later) doesn't change the outcome when the rate is constant. This commutativity is exact: USD 1,000 × (1 − tax) × (1 + r)^n = USD 1,000 × (1 + r)^n × (1 − tax). The trick is everything else equal almost never holds in practice.
What breaks the identity in real life: (1) the IRS contribution limit treats the two equally in nominal dollars but the Roth costs more in current after-tax pain, so high-bracket workers can effectively get MORE tax-advantaged space via Roth; (2) Roth has no RMDs, so estate-planning value favors Roth for those who don't need the money; (3) state taxes vary by state for current vs retirement — moving from CA to TX in retirement flips the analysis dramatically. The tool above handles (1) via the side-savings model; (2) and (3) require manual judgment.
Income Limits — Where the Backdoor Roth Lives
Traditional IRA contributions are always allowed for any income, but the deductibility phases out if you (or spouse) have a workplace retirement plan: 2026 phase-out USD 81K-USD 91K (single) / USD 129K-USD 149K (married joint). Roth IRA contributions phase out at USD 153K-USD 168K (single) / USD 242K-USD 252K (married joint). Above these, direct Roth contribution is blocked — but the "backdoor Roth" workaround (contribute non-deductible Traditional, then convert to Roth) is legal and widely used. Watch the "pro-rata rule" if you have existing Traditional IRA balances — they get blended into the conversion taxable amount.
For workers with no IRA before today and high income, the pure backdoor Roth is mechanically simple: open a Traditional IRA, contribute USD 7,500 non-deductible, immediately convert to Roth, file Form 8606. Effective Roth contribution at any income level. The mega-backdoor Roth (via after-tax 401(k) contributions) provides similar treatment for amounts up to the 415(c) limit.
"Vanguard 2024 IRA participation: 25% of US households own an IRA, with median balance USD 87,000 (Traditional) vs USD 39,000 (Roth). Roth participation skews younger — 41% of Roth IRA owners are under 45, vs 23% for Traditional."
The Order of Operations Most US Workers Should Follow
The widely-recommended sequence: (1) 401(k) up to full employer match; (2) max out Roth IRA (USD 7,500 in 2026); (3) max out HSA if eligible (USD 4,400 single / USD 8,750 family in 2026); (4) max out 401(k) to the USD 24,500 elective limit; (5) mega-backdoor Roth if your plan supports it; (6) taxable brokerage. This ordering prioritizes tax-advantaged space by leverage: match first (100% instant return), then Roth IRA (broadest investment selection, tax-free), then HSA (triple-tax-advantaged for medical), then the rest of 401(k). Don't reverse the order — leaving employer match for Roth IRA is mathematically wrong.
The "Hot Take" Most Calculators Skip
The naive Roth-vs-Traditional comparison ignores that Traditional's upfront tax deduction frees up dollars you can invest separately in a taxable account. The tool above includes that side-savings credit at 15% long-term capital gains. Without it, Traditional looks artificially worse — you're comparing USD 7.5K post-tax (Roth) vs USD 7.5K pre-tax (Traditional) without accounting for what you did with the USD 1,800 of tax savings (at 24% bracket). With the side-savings credit applied to a taxable brokerage account, the comparison becomes mathematically symmetric at equal tax rates, and the verdict swings cleanly on whether your future rate is higher or lower than today's. Most online "IRA vs Roth" calculators omit this credit entirely — overstating Roth's edge by 10-20% in lower-tax-rate-future scenarios.
10 Facts About IRAs and Roth IRAs
IRS 2026 IRA limit: USD 7,500 + USD 1,100 catch-up (age 50+). Same limit for Traditional + Roth combined.
The Roth IRA was created by the Taxpayer Relief Act of 1997. Named after Senator William Roth (R-DE).
Traditional IRA deductibility phases out at higher incomes if covered by a workplace retirement plan. Roth IRA also has income limits (USD 153-168K single, USD 242-252K joint in 2026).
Roth IRA has no RMDs during the owner's lifetime. Traditional IRA RMDs start at age 73.
The backdoor Roth: contribute non-deductible Traditional, convert to Roth. Legal for any income but watch the IRS pro-rata rule on existing Traditional balances.
Vanguard 2024: median Traditional IRA balance USD 87,000; median Roth IRA balance USD 39,000.
Roth contributions can always be withdrawn tax + penalty-free. Roth earnings need 5-year holding period + age 59½.
SEP IRA for self-employed: up to 25% of net earnings or USD 70,000 in 2026. Much higher limit than personal IRA.
Spousal IRA: a non-working spouse can contribute up to the IRA limit using the working spouse's earned income.
5-year rule: Roth conversions must season 5 years before withdrawal to avoid the 10% penalty (even if you're over 59½).
Frequently Asked Questions
- Rule of thumb: lower current tax rate (12% federal and below) → Roth; higher current rate (32%+) → Traditional; middle (22-24%) → split or use the tool above with your specific brackets. The decision hinges on your current vs expected retirement marginal tax rate; the tool's verdict bar shows the dollar difference.
- Use the backdoor Roth: contribute non-deductible USD 7,500 to a Traditional IRA, then immediately convert to Roth. Legal at any income. Watch the pro-rata rule — if you have existing pre-tax Traditional IRA balances, the conversion is partially taxable. File Form 8606 to track basis. Workers with workplace 401(k) but no existing IRA have the cleanest path.
- Yes — the USD 7,500 limit is the COMBINED limit. You can split however you like (e.g. USD 4,500 Roth + USD 3,000 Traditional). Many planners recommend splitting for tax diversification, especially if you're uncertain about your retirement tax rate. The flexibility lets you control which bucket to draw from in retirement to manage your taxable income year-by-year.
- Traditional IRA: 59½ for both contributions + earnings (10% penalty + income tax if earlier, with limited exceptions for first home, education, medical). Roth IRA: contributions can always be withdrawn tax + penalty-free at any age; earnings need both 59½ AND 5-year holding to avoid the 10% penalty. The Roth flexibility on contribution-only withdrawals makes it a backup emergency fund for risk-tolerant savers.
- Vanguard, Fidelity, and Schwab are the three big low-cost custodians. All three offer free account opening, no minimum, broad index funds with expense ratios under 0.10%, and ETF trading. Fidelity arguably has the best mobile UX; Vanguard pioneered low-cost indexing; Schwab has the strongest branch presence. Avoid robo-advisors charging more than 0.30% AUM for IRA management — the fee differential compounds significantly over 20-30 years.
- Yes. Each has its own contribution limit (IRA: USD 7,500; 401(k): USD 24,500 in 2026). The Traditional IRA deduction phases out if you're covered by a workplace plan but the contribution itself is always allowed — non-deductible if income too high. Most US workers should fund both: 401(k) for the match + IRS limit, IRA for the broader investment selection.
- A multi-year strategy where you convert chunks of Traditional IRA to Roth in low-income years (e.g. early retirement, gap year, layoff), filling up lower tax brackets without hitting higher ones. Each conversion has its own 5-year clock before withdrawals avoid the 10% penalty. Popular with FIRE practitioners who retire early and need penalty-free access to retirement funds before age 59½.
- Most states mirror federal treatment but with notable exceptions. States with no income tax (TX, FL, WA, NV, TN, SD, AK, WY, NH) tax neither contributions nor withdrawals. States that fully exempt retirement income (IL, MS, PA): better for Traditional. States that tax retirement income at full rate (CA, NY, OR, MN): roughly neutral. Add state marginal rate to federal when using this tool — the tax-rate difference between states often exceeds the IRA structural choice.
- Traditional IRA passes to beneficiaries who must drain the account within 10 years (SECURE Act, post-2019), paying income tax on each withdrawal. Roth IRA also passes subject to the 10-year rule but withdrawals are tax-free. For estate planning, Roth is significantly more valuable to heirs — they get the full balance untaxed. High-net-worth families often convert Traditional to Roth in lower-tax years specifically to pass tax-free dollars to the next generation.
- Yes — IRA eligibility is based on US-source earned income, not citizenship or visa status. The tax-advantaged growth is valuable even if you eventually return home. Roth specifically: post-tax contributions are unaffected by foreign retirement; future withdrawals will be tax-free per US, though your home country may tax them depending on the bilateral treaty (Singapore: typically yes; Australia: typically yes; UK: complicated). Consult a cross-border CPA for your specific home-country treaty before retirement.
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