Should I choose a Roth or a Traditional account?

It depends mostly on your tax rate now versus in retirement. If you expect a higher rate in retirement, a Roth (pay tax now at the lower rate) usually wins. If you expect a lower rate in retirement, Traditional (defer tax) usually wins. If the rates are similar, the two are close to a tie, and other factors decide.

Why do equal tax rates break even?

Because multiplication is commutative. Traditional grows the full pre-tax amount and then takes the retirement rate; Roth takes the current rate first and then grows. When the two rates are equal, the same fraction is removed either way, so the after-tax results are identical. The choice only matters when your rates differ.

Does an employer match change the answer?

It can. Employer matching contributions almost always go into a Traditional (pre-tax) account regardless of whether your own contributions are Roth, and that match is free money you should capture first. This calculator compares your own contributions only; treat the match as a separate reason to use the Traditional side at least up to the match.

Is a Roth better because withdrawals are tax-free?

Tax-free withdrawals are the Roth benefit, but they are not automatically better. You paid the tax up front instead, at today's rate. The math only favors Roth when today's rate is lower than your retirement rate. Roth does have secondary advantages: no required minimum distributions and tax-free growth, which can matter beyond the pure rate comparison.

Roth vs Traditional Calculator

Compare a Roth and a Traditional retirement account on equal pre-tax dollars, and see which leaves you more after tax based on your current and retirement tax rates.

The Roth vs Traditional choice comes down to one comparison: your tax rate now versus in retirement. A Traditional account defers tax to retirement; a Roth pays it up front and grows tax-free. On equal pre-tax dollars, Roth wins when your current rate is lower than your retirement rate, Traditional wins when it is higher, and they tie when the rates match. This calculator shows the after-tax value of each.

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Better option

Traditional

Which account leaves more after tax, given your current and retirement tax rates.

After-tax difference (Roth minus Traditional): -$13,224.51
Roth, after tax: $502,531.38
Traditional, after tax: $515,755.89
Pre-tax future value: $661,225.50

Assumptions

Both options are compared on equal PRE-TAX dollars: the same contribution stream grows to one pre-tax future value. Traditional taxes that whole value at your retirement rate on withdrawal; Roth instead taxes the contributions up front at your current rate and then grows and withdraws tax-free. So the after-tax results differ only by the tax factor: Traditional keeps (1 minus the retirement rate), Roth keeps (1 minus the current rate).
Because of that, Roth wins exactly when your current tax rate is below your retirement rate, Traditional wins when it is above, and the two break even when the rates are equal. The contribution can optionally grow each year; growth uses the shared time-value engine, not a re-derived formula.
All figures are nominal dollars and are not adjusted for inflation. The comparison assumes the same gross amount is available either way and that tax rates are flat (a single marginal rate now and a single rate in retirement), not full bracket math.
Not modeled: contribution limits, an employer match (which usually goes to a Traditional account and can change the decision), required minimum distributions on Traditional balances, the Roth 5-year rule, state income tax, Medicare IRMAA surcharges, and the alternative of investing the Roth tax savings. Real retirement tax rates also depend on Social Security and other income, which this does not include.
This is an estimate for educational purposes only, not tax or investment advice. Your actual outcome depends on future tax law and returns. Consult a qualified professional for your situation.

How it works

The Roth vs Traditional choice is a single comparison: your tax rate now versus your tax rate in retirement. Both accounts are compared here on equal pre-tax dollars, which is the fair way to do it.

The same contribution stream grows to one pre-tax future value. From there the two options differ only in when the tax is taken:

Traditional: you contribute pre-tax, the full amount grows, and the whole balance is taxed at your retirement rate when you withdraw. After-tax value = pre-tax value times (1 minus the retirement rate).
Roth: you pay tax up front at your current rate, so a smaller amount goes in, and it then grows and is withdrawn tax-free. After-tax value = pre-tax value times (1 minus the current rate).

Because each option just multiplies the same pre-tax future value by one tax factor, the result is simple: Roth wins when your current rate is lower than your retirement rate, Traditional wins when it is higher, and they tie exactly when the two rates are equal. The growth itself uses the shared time-value engine, so the comparison is always internally consistent.

Worked example

Contribute $7,000 a year for 30 years at a 7 percent return, with a 24 percent rate today and a 22 percent rate in retirement:

Pre-tax future value of the contributions: about $661,225.50.
Traditional, after tax: $661,225.50 times (1 minus 0.22) = $515,755.89.
Roth, after tax: $661,225.50 times (1 minus 0.24) = $502,531.38.

Traditional wins here by $13,224.51, because the current rate (24 percent) is higher than the retirement rate (22 percent), so deferring the tax to the lower rate pays off. Flip the rates (22 percent now, 24 percent later) and Roth wins by the same logic. When the rates are equal, the two are identical to the cent.

Scope and limitations

All figures are nominal dollars and use a single flat rate now and in retirement, not full bracket math. Not modeled: contribution limits, an employer match (which usually lands in a Traditional account and is worth capturing first), required minimum distributions on Traditional balances, the Roth 5-year rule, state income tax, Medicare IRMAA surcharges, and the option of investing the Roth tax savings. Your real retirement rate also depends on Social Security and other income. This is an estimate for education, not advice.

Sources

Frequently asked questions

Should I choose a Roth or a Traditional account?: It depends mostly on your tax rate now versus in retirement. If you expect a higher rate in retirement, a Roth (pay tax now at the lower rate) usually wins. If you expect a lower rate in retirement, Traditional (defer tax) usually wins. If the rates are similar, the two are close to a tie, and other factors decide.
Why do equal tax rates break even?: Because multiplication is commutative. Traditional grows the full pre-tax amount and then takes the retirement rate; Roth takes the current rate first and then grows. When the two rates are equal, the same fraction is removed either way, so the after-tax results are identical. The choice only matters when your rates differ.
Does an employer match change the answer?: It can. Employer matching contributions almost always go into a Traditional (pre-tax) account regardless of whether your own contributions are Roth, and that match is free money you should capture first. This calculator compares your own contributions only; treat the match as a separate reason to use the Traditional side at least up to the match.
Is a Roth better because withdrawals are tax-free?: Tax-free withdrawals are the Roth benefit, but they are not automatically better. You paid the tax up front instead, at today's rate. The math only favors Roth when today's rate is lower than your retirement rate. Roth does have secondary advantages: no required minimum distributions and tax-free growth, which can matter beyond the pure rate comparison.

Related calculators

Learn how this works

New to this topic? Our companion guide explains it in plain language: Are You On Track for Retirement? How to Actually Run the Numbers

Last reviewed June 2026.