Roth or traditional: which leaves you more after tax?
Put in what you save each year, for how long, and your tax rate now and in retirement. This shows what each choice is worth after tax, and the retirement tax rate at which they tie. It works for a 401(k), 403(b) or IRA.
Roth vs. traditional
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After tax, the Roth comes out ahead by
$15,954
- Roth, after tax
- $708,456
- Traditional, after tax
- $692,502
- Break-even retirement tax rate
- 19.7%
What each is worth after tax, year by year
Roth Traditional
How the traditional side adds up
An estimate at a constant return and constant tax rates, with contributions at the end of each year. It ignores state rules, credits and phase-outs. The reasoning, and where to open an account, are in the guide: Brokerage accounts for beginners.
Six things behind the answer
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The whole question is two tax rates
A traditional 401(k) or IRA takes money before tax and taxes everything when it comes out. A Roth takes money after tax and lets qualified withdrawals come out tax-free (IRS Topic 451). If your tax rate is the same on the way in and on the way out, and you save the same pre-tax amount, the two end up identical: multiplying by 0.78 now or by 0.78 later gives the same answer. Everything else in the calculator is about why real life is rarely that tidy.
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Why we compare the same contribution
Most people pick a number, say 10% of pay or $500 a month, and keep it whichever account they choose. A traditional contribution of that size costs less take-home pay, because it lowers this year's tax. The calculator counts that tax saving explicitly: it either goes into an ordinary taxable account at the same return (with 15% long-term capital-gains tax on its growth when sold; IRS Topic 409), or it gets spent. Be honest about which describes you. If the savings disappear into the checking account, the traditional side loses that money.
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A Roth dollar holds more
The contribution limit is the same number for both: $24,500 for a 401(k) and $7,500 for an IRA in 2026 (IRS). But $7,500 in a Roth is $7,500 you will never pay tax on, while $7,500 in a traditional IRA still owes tax. If you are already at the limit, the Roth shelters more money from tax, and the traditional saver's leftover tax saving has to go into a taxable account. That is why, at equal tax rates, the Roth edges ahead here.
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What tax rate to use
Use your marginal rate: the rate on your last dollar of income, federal plus state. For 2026, federal rates run 10%, 12%, 22%, 24%, 32%, 35% and 37%; a single filer's taxable income over $50,400 is taxed at 22%, and over $105,700 at 24% (IRS). The retirement rate is a guess about the future, so the calculator shows the break-even rate: the retirement rate at which the two choices tie. If you expect to be above it, the Roth wins; below it, the traditional account does.
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Things the arithmetic leaves out
Roth IRAs have no required withdrawals during your lifetime, and neither do Roth accounts inside a 401(k) or 403(b) while you are alive; traditional accounts generally must start paying out at 73 (IRS). Roth withdrawals don't count as taxable income in retirement, which can matter for how much of your Social Security is taxed. Traditional contributions lower today's income, which can matter for credits and student-loan payments based on income. Having some money in each is a reasonable hedge when you can't tell.
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Who can use which
Almost every 401(k) now offers a Roth option: 98% of the plans Vanguard administers did in 2025, though only 18% of participants used it (Vanguard, How America Saves 2026). Roth IRA contributions phase out between $153,000 and $168,000 of modified adjusted gross income for single filers, and $242,000 to $252,000 for married couples filing jointly, in 2026. The IRS usually announces next year's limits in November; we will update these figures when it does.
Questions people ask
Is a Roth or traditional 401(k) better?
It depends on your tax rate now compared with your tax rate when you withdraw. If you expect a higher rate in retirement, or you already contribute the maximum, the Roth tends to come out ahead. If you are in a high bracket now and expect a much lower one later, the traditional account usually does, provided the tax it saves you each year is invested rather than spent.
What if my tax rate is the same now and in retirement?
With the same pre-tax amount saved, the two are mathematically identical. With the same contribution amount, which is how most people save, the Roth comes out slightly ahead, because the traditional account's tax saving has to sit in a taxable account. Contributing $7,500 a year for 30 years at 7% with a 22% rate both now and later, the Roth ends with about $708,000 after tax and the traditional account plus its invested tax savings with about $693,000.
How much can I put in a Roth 401(k) or Roth IRA in 2026?
$24,500 in a 401(k), Roth and traditional combined, plus an $8,000 catch-up from age 50 ($11,250 at ages 60 to 63). $7,500 in IRAs, plus $1,100 from age 50. Roth IRA eligibility phases out between $153,000 and $168,000 of modified adjusted gross income for single filers and $242,000 to $252,000 for joint filers.
Can I have both a Roth and a traditional account?
Yes. Most 401(k) plans let you split contributions between Roth and pre-tax, and you can contribute to an IRA as well as a workplace plan, subject to the income limits for Roth IRA contributions and for deducting traditional IRA contributions. Splitting is a reasonable hedge when you can't tell which way your tax rate will go.
Does the employer match go into the Roth?
The calculator leaves the match out because it is the same whichever account you choose for your own contributions. Check your plan's documents for how the match is taxed. Whichever account you pick, contributing enough to collect the full match comes first.
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This calculator produces estimates from the inputs you provide at constant returns and tax rates. Tax law changes, and your situation may involve rules it does not model. It is educational and is not personalized financial or tax advice. We are not paid by any company named on this page.