Traditional vs Roth Calculator
Retirement Decision Tool
Traditional vs Roth Calculator
Compare hypothetical after-tax outcomes of Traditional and Roth contributions across 401(k), 403(b), 457(b), and IRA accounts.
Your Assumptions
2026 limits: $24,500 for 401(k)/403(b)/457(b); $7,500 for IRAs (plus catch-up if age 50+)
Hypothetical After-Tax Wealth at Retirement
Based on the assumptions you entered
Traditional
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Roth
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Growth illustration (constant return assumed)
| Metric | Traditional | Roth |
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How the Two Options Differ
Traditional (pre-tax) contributions to a 401(k), 403(b), 457(b), or Traditional IRA generally reduce taxable income today. Growth is tax-deferred; withdrawals in retirement are typically taxed as ordinary income.
Roth (after-tax) contributions to a Roth 401(k), Roth 403(b), Roth 457(b), or Roth IRA use money already taxed. There is no current-year deduction. Qualified withdrawals — including growth — are tax-free.
In most workplace plans, employer matches go to the Traditional side even if you elect Roth. IRA limits are lower, and Roth IRA eligibility can depend on income.
Factors That Often Influence the Decision
- R Roth may fit when you expect similar or higher tax rates in retirement, or anticipate rising income.
- T Traditional may fit when you are in a higher bracket now and expect a lower rate later, or need the current tax savings.
- ? Many people use both for tax diversification. Individual circumstances vary.
| Feature | Traditional | Roth |
|---|---|---|
| Account types | 401(k), 403(b), 457(b), Traditional IRA | Roth 401(k), Roth 403(b), Roth 457(b), Roth IRA |
| Tax on contributions | Deferred (pre-tax) | Paid now (after-tax) |
| Tax on qualified withdrawals | Ordinary income tax | None (if qualified) |
| Impact on current taxable income | Generally reduces it | No reduction |
| Required Minimum Distributions | Yes (generally age 73) | No during owner’s lifetime for Roth 401(k)/403(b)/457(b) & Roth IRA (SECURE 2.0) |
| 2026 contribution limits |
Workplace plans (401(k)/403(b)/457(b)): $24,500 combined Traditional + Roth (+ catch-up if age 50+). IRAs: $7,500 combined Traditional + Roth (+ catch-up if age 50+). Roth IRA eligibility may be limited by income. |
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Frequently Asked Questions
What is the difference between Traditional and Roth retirement accounts?
Traditional contributions to a 401(k), 403(b), 457(b), or Traditional IRA are generally made with pre-tax dollars, reducing current taxable income. Withdrawals in retirement are typically taxed as ordinary income. Roth contributions (Roth 401(k), Roth 403(b), Roth 457(b), or Roth IRA) are made with after-tax dollars. Qualified withdrawals in retirement are tax-free.
When might a Roth contribution be considered?
A Roth is often considered when someone expects their tax rate in retirement to be the same or higher than their current rate, or when they value tax-free growth and withdrawals. Younger savers who anticipate higher future earnings frequently explore Roth options.
Do employer matches go into Traditional or Roth?
In most 401(k), 403(b), and 457(b) plans, employer matching contributions are deposited into the Traditional (pre-tax) side of the plan even if you elect Roth employee contributions. Check your specific plan documents.
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Assumptions & Important Disclosures
- • Hypothetical illustration only. Results are educational estimates based on your inputs — not guarantees or forecasts of future performance.
- • Contributions are assumed annually at year-end for the full years until retirement age. Returns are held constant and compounded annually; actual returns will vary and can be negative.
- • When “Reinvest Traditional tax savings” is selected, annual tax savings are assumed invested in a taxable account at the same return rate. Actual taxable accounts face tax drag on dividends, interest, and realized gains.
- • No inflation adjustment, contribution increases, Social Security, pension, or other income sources are modeled. Employer matches are not included (in most plans they go to the Traditional side).
- • Tax rates are illustrative only and depend on your full tax situation and future law. This tool does not provide tax, legal, or investment advice and is not a recommendation. Consult a qualified professional before making decisions.
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