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Roth vs Traditional IRA Calculator

Compare after-tax retirement value based on your current and projected retirement tax rates

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Tax Rates
If you expect same or higher taxes in retirement → Roth. Lower taxes → Traditional.
Contributions & Growth
2024 limit: $7,000 ($8,000 if age 50+)
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Roth vs Traditional: Key Differences

Roth IRA

Contributions are made with after-tax dollars. Growth and qualified withdrawals are 100% tax-free. No required minimum distributions (RMDs). Best if you expect higher taxes in retirement or want tax flexibility.

Traditional IRA

Contributions may be tax-deductible (reduces current taxable income). Growth is tax-deferred. Withdrawals in retirement are taxed as ordinary income. RMDs required starting at age 73. Best if you expect lower taxes in retirement.

Roth Income Limits

Roth IRA has income phase-out limits: single filers phase out between $146K-$161K (2024). Over $161K? Use backdoor Roth (contribute to Traditional, then convert). No income limits for Traditional IRA contributions.

The Key Decision Factor

If your tax rate will be HIGHER in retirement (young, low income now, rising income) → Roth wins. If your tax rate will be LOWER (high earner now, retiring on less) → Traditional wins. If similar → Roth offers more flexibility.

Frequently Asked Questions

Roth or Traditional IRA — which is better?
It depends on whether your tax rate will be higher or lower in retirement. If higher in retirement: Roth wins — you pay taxes now at a lower rate. If lower in retirement: Traditional wins — you defer taxes to a lower bracket. When uncertain, Roth often wins because of tax diversification, no RMDs, and historically Congress has been more likely to raise than lower rates.
Can I contribute to both a Roth IRA and Traditional IRA?
Yes, but your combined contributions can't exceed the annual limit ($7,000 in 2024). Many people split contributions between both for tax diversification. If you have a 401k at work, you can max both the 401k (up to $23,000) and an IRA ($7,000) in the same year.
What's the backdoor Roth IRA?
High earners over the Roth income limit ($161K single, $240K married in 2024) can contribute to a non-deductible Traditional IRA and then convert it to a Roth (the "backdoor Roth"). This is legal and widely used. Beware of the pro-rata rule if you have other Traditional IRA balances.