Roth vs. Traditional IRA Calculator
This Roth vs. Traditional IRA calculator compares the long-term outcomes of both account types based on your tax assumptions. Enter your annual IRA contribution, years to retirement, expected investment return, current tax rate and expected tax rate in retirement. The calculator projects the final balance for both account types and determines which comes out ahead in after-tax dollars. A Roth IRA makes sense if you expect higher tax rates in retirement: you pay tax now at a lower rate and all growth and withdrawals are tax-free forever. A Traditional IRA wins if you expect lower tax rates in retirement: you defer taxation to a time when each dollar is taxed more lightly, and the immediate tax deduction compounds in your favour. The results display side-by-side projections of both accounts, showing projected balance, after-tax value at retirement, the annual tax saving (Traditional) or effective cost (Roth), and a clear verdict on which option provides more after-tax wealth. Most young earners benefit from Roth accounts because they expect higher future earnings and tax rates. Higher earners in peak earning years often favour Traditional contributions for the immediate tax break.
Contributing $7,500/year for 30 years at 7% return. If your tax rate stays at 22%, Roth gives $708,456 tax-free vs. Traditional $552,596 after tax. Similar outcome (same tax rate assumed).
How to read the badges beside each field: Official figures come from a cited authority; Regional average and Illustrative assumption values are editable placeholders, so replace them with your own figure before you rely on the result.
When Roth beats Traditional: expect higher taxes in retirement
A Roth IRA is funded with after-tax dollars. You pay income tax on the contribution today, but all future growth and qualified withdrawals are completely tax-free. If you expect your marginal tax rate in retirement to be higher than your rate today, a Roth wins: you lock in taxation at the lower current rate and never pay tax on the compounded gains.
Young earners in early career years often fall into this camp. A 25-year-old earning $55,000 may be in the 22% bracket now, but expects peak earnings and a larger Social Security payment to push them into the 24% or 28% bracket in retirement. Every dollar of Roth contribution shelters future growth from that higher rate.
Roth accounts also have no required minimum distributions (RMDs) during the owner's lifetime (as of the SECURE 2.0 Act), making them valuable for estate planning and flexible late-retirement spending.
When Traditional beats Roth: expect lower taxes in retirement
A Traditional IRA is funded with pre-tax dollars (if you qualify for the deduction). You get a tax break today and pay income tax only when you withdraw in retirement. If your tax rate in retirement will be lower than it is now, a Traditional IRA wins: you defer taxation to a period when each dollar is taxed less heavily.
A high-earning surgeon at 50 in the 35% bracket who plans to live on $80,000/year in retirement (sitting in the 22% bracket) benefits substantially from deferral. The immediate tax saving each year compounds in their favour when invested.
Traditional IRA deductibility phases out if you (or your spouse) are covered by a workplace retirement plan and your income exceeds certain MAGI thresholds. For 2026: single/head of household phase-out is $81,000 to $91,000; married filing jointly (covered spouse) phase-out is $129,000 to $149,000. See IRS Publication 590-A for the full tables.
Contribution limits and eligibility rules for 2026
The IRS sets annual IRA contribution limits, updated periodically for inflation. For the 2026 tax year:
- General limit: $7,500 per person across all IRAs combined
- Age 50 or older catch-up: $8,600 per person
- You must have earned income at least equal to your contribution amount
- The deadline to contribute for a tax year is typically the tax filing deadline of the following April
Roth IRA income phase-out ranges for 2026 (MAGI):
| Filing status | Phase-out begins | Phase-out ends |
|---|---|---|
| Single / Head of household | $153,000 | $168,000 |
| Married filing jointly | $242,000 | $252,000 |
| Married filing separately (lived with spouse) | $0 | $10,000 |
Source: IRS Publication 590-A, 2026. Verify current-year limits at irs.gov before contributing.
Worked example
Assumptions: $7,500/year contribution, 30 years, 7% annual return, 22% current tax rate, 22% retirement tax rate.
r = 7 / 100 = 0.07
n = 30 years
FV of annuity = contribution x ((1 + r)^n - 1) / r
FV = 7,500 x ((1.07)^30 - 1) / 0.07
FV = 7,500 x (7.6123 - 1) / 0.07
FV = 7,500 x 94.461 = $708,456 (both accounts, same gross FV)
With equal current and retirement tax rates (22%):
- Roth after-tax value at retirement: $708,456 (no tax on withdrawal)
- Traditional after-tax value at retirement: $708,456 x (1 - 0.22) = $552,596
- Annual Traditional tax saving now: $7,500 x 0.22 = $1,650/year
At identical tax rates, the Roth appears to win on the surface because the entire balance is tax-free. However, the Traditional account's annual $1,650 tax saving, if invested in a taxable account at the same 7% return over 30 years, grows to approximately $155,860 before tax. After a 22% capital-gains-equivalent tax that is roughly $121,571. Adding this to the Traditional after-tax balance ($552,596 + $121,571 = $674,167) still falls short of the Roth's $708,456 in this simplified comparison.
The critical variable is whether tax rates rise or fall between now and retirement. This calculator shows the direct account comparison; the reinvestment of tax savings is a separate analysis.
Editor's insight: the equal-contribution trap most comparisons miss
The number that trips up most people using a Roth versus Traditional comparison is the contribution itself. This tool funds both accounts with the same nominal dollar amount, say $7,500, which quietly assumes you can pay the Roth tax bill from a separate pocket of cash. When you can do that, the Roth effectively shelters more money and tends to win even at identical tax rates. If instead the tax on a Roth contribution comes out of the $7,500, the two accounts are mathematically identical whenever your current and retirement rates match. Knowing which situation you are in matters more than any projected balance.
The real decision hinges on one honest guess: will your marginal rate be higher or lower when you withdraw? Young savers in the 12% or 22% bracket who expect promotions, a paid-off mortgage, and sizable Social Security often land higher later, which favors Roth. A peak-earning professional in the 32% or 35% bracket who plans a leaner retirement usually favors the Traditional deduction now.
Two details quietly change the answer. Roth IRAs carry no required minimum distributions during the owner's lifetime, so they keep compounding untouched, and the income phase-out (single filers above $153,000 MAGI for 2026) can shut the Roth door before you notice, pushing high earners toward the backdoor route.
Roth vs. Traditional IRA: frequently asked questions
What is the 2026 IRA contribution limit?
$7,500 per person, or $8,600 if you are age 50 or older by the end of 2026. This limit applies across all your IRAs combined (Roth and Traditional together). Source: IRS, Retirement Topics - IRA Contribution Limits (irs.gov).
Who can contribute to a Roth IRA?
Anyone with earned income below the Roth IRA income limits. In 2026 the phase-out range begins at $153,000 MAGI for single filers and heads of household (phasing out completely at $168,000), and $242,000 for married filing jointly (phasing out at $252,000). If married filing separately and you lived with your spouse at any point during the year, the phase-out is $0 to $10,000. Source: IRS Publication 590-A.
Can I have both a Roth and a Traditional IRA?
Yes. You can contribute to both types of IRA in the same year, but your total contributions across all IRAs cannot exceed the annual limit ($7,500 or $8,600 if age 50 or older in 2026). There is no rule preventing you from holding both account types simultaneously.
What is the backdoor Roth IRA?
A strategy available to high earners above the Roth IRA income limits. You contribute to a non-deductible Traditional IRA (no income limit applies), then convert the balance to a Roth IRA. IRS Notice 2014-54 addresses the tax treatment of this conversion. The pro-rata rule applies if you hold other pre-tax IRA funds. Consult a qualified tax professional before using this strategy.
Official sources
- IRA contribution limits: IRS, Retirement Topics - IRA Contribution Limits.
- Roth IRA eligibility and income limits: IRS Publication 590-A, Contributions to Individual Retirement Arrangements.
- Distributions and withdrawal rules: IRS Publication 590-B, Distributions from Individual Retirement Arrangements.
Reviewed by the CalculatorHub team, edited by James Graham, 11 July 2026. See our methodology. General information only, not financial or tax advice. Consult a qualified professional for your situation.