Taxable vs. Tax-Deferred Investments Calculator

Put the same savings into a taxable account and a tax-deferred one, and see which leaves you more after tax when you cash out or draw an income. Pair this with the income tax calculator online for a fuller picture before you make a decision.

Enter your savings plan

Amount invested today

Goes into both accounts on the same terms as your contributions.

Contribution

Contribute every

Years of saving

yrs

Annual rate of return

Tax rate now

Tax rate in retirement

Use your marginal rates: federal bracket plus state rate.

Contributions to the tax-deferred account are tax-deductibleLike a traditional 401(k) or IRA. The tax saved is added to the contribution, so both accounts cost you the same take-home pay. Untick for a non-deductible IRA or deferred annuity.

More options

Share of the return taxed each year (taxable account)

Use 100% for savings, CDs and bond funds. A broad stock index fund pays out roughly a quarter of its return as dividends; the rest is unrealized growth.

Capital gains rate when you sell

Applies to growth that was not taxed along the way. 0%, 15% or 20% federal, plus any state tax.

Years of withdrawals

yrs

Works out the level after-tax income each account can pay. Use 0 to skip.

Your results

Tax-deferred comes out ahead by

–

Tax-deferred, after tax

–

Taxable, after tax

–

Your out-of-pocket savings–

Taxable account balance–

Tax paid along the way (taxable)–

Capital gains tax when sold–

Tax-deferred account balance–

Tax due when withdrawn–

After-tax income from taxable–

After-tax income from tax-deferred–

Balances grow monthly. Yearly tax on the taxable account is paid out of that year's earnings. Withdrawal income is paid at the start of each year while the rest stays invested.

Year-by-year balances

How the two accounts grow while you save. The last column is what the tax-deferred account would be worth if you withdrew it all that year.

Year	Taxable balance	Tax paid that year	Tax-deferred balance	Tax-deferred after tax

Results are estimates for educational purposes and are not financial, tax or legal advice.