Roth vs. Traditional IRA Calculator: Compare Roth IRA Value

How a Traditional IRA vs Roth IRA Calculator Works

Both of these individual retirement accounts let your investment grow without yearly taxes on earnings. They differ only in when the IRS collects its share. With a Traditional IRA you skip tax on the money you contribute now, and the deferred taxes come due as taxes owed on every dollar you withdraw later. With a Roth IRA you contribute money that has already been taxed, and qualifying distributions come out free of tax. A good comparison therefore has to convert both accounts into the same unit: after-tax dollars at the year you retire. The roth plan contributions calculator online is free to use with no sign-up, and works on desktop and mobile.

The calculator does that by treating every contribution as the same amount of pre-tax pay. Set aside $6,200 of gross income and the Traditional account receives all $6,200, while the Roth account receives what is left after your current tax rate takes its cut. Both balances grow at the same return, and the Traditional balance is reduced by your expected retirement tax rate at the end. Anything else you could change, from age to account type, falls out of that one idea.

The inputs you provide

• Current age and retirement age, which set the number of years the money compounds.
• Starting account balance, the amount you have already saved and would hold in either account.
• Monthly contributions or an annual total, converted to a yearly figure.
• Annual rate of return, the growth you expect on the investment mix inside the account.
• Tax bracket today and your expected bracket in retirement.

The formula behind the result

The future value of a stream of yearly contributions plus a starting balance is the engine of every retirement account projection:

Here \(B\) is the starting balance, \(C\) the yearly contribution, \(r\) the rate of return and \(n\) the years until retirement. For the Traditional side the after-tax balance is:

For the Roth side, you run the same formula with \(B\) and \(C\) multiplied by \((1 - t_{now})\), and no tax comes off at the end. When \(t_{now}\) equals \(t_{ret}\), the two results are identical, which is the core insight: the winner depends on which tax rate is higher, not on which account is "better".

Worked Example: Roth vs. Traditional IRA Calculator Results

Take a saver aged 34 who plans to retire at 65, so the money grows for 31 years. This person has $14,300 saved, sets aside $6,200 a year, expects a 6.5% annual rate of return, sits in the 24% bracket now and expects the 22% bracket in retirement. The table shows what goes in. If you want to see how the figures change, the free roth 401k conversion calculator gives you an instant result you can adjust as you go.

Traditional balance after tax

The full $14,300 and $6,200 a year compound to a future value of $677,267. Withdrawals are taxable, so at a 22% retirement rate you keep \(677{,}267 \times 0.78 = \) $528,268 in after-tax dollars.

Roth balance after tax

Because the 24% bracket applies today, the Roth account receives only 76% of each amount: $10,868 to start and $4,712 a year. That grows to $514,723, and since qualifying distributions are tax-free, that is also the spendable figure.

The Traditional IRA wins here by $13,545, because the saver moves from a 24% bracket to a 22% bracket. Flip the retirement rate to 28% and the same Roth account wins by $27,091. The next table keeps every other input fixed and moves only the retirement tax rate.

Traditional vs. Roth IRA Calculator Rules That Change the Answer

The comparison above assumes you can deduct a Traditional contribution in full and qualify for a Roth in full. The rules below decide whether those assumptions fit you, so check them against your own situation before you trust the two balances the tool returns.

Tax-deductible contributions today

A Traditional IRA gives you a tax break now: contributions may be tax-deductible, which lowers this year's taxable income and produces immediate tax savings. The deduction can shrink or vanish if you or your spouse are covered by a workplace plan and your income is high, and a contribution you cannot deduct is called non-deductible. Non-deductible money behaves more like a Roth contribution going in, but the earnings are still taxed on the way out.

Tax-deferred growth and tax-free withdrawals

Inside either account, earnings are tax-deferred while the money stays put, so you never owe yearly tax on dividends or gains. The Roth goes one step further: tax-free withdrawals of earnings once you are past age 59½ and the account has been open five years. Withdrawing earnings early from either account can trigger penalties, so the projection assumes you leave the money alone until your retirement date.

Required minimum distributions

A Traditional IRA forces required minimum distributions to begin in your seventies, and the start age depends on your birth year. A Roth IRA has no required withdrawals for the original owner, which is why it also suits savers who want to leave money behind rather than spend it.

Income limits and eligibility

Anyone with earned income can contribute to a Traditional IRA, but the deduction phases out at higher incomes. A Roth IRA has income limits of its own, measured by modified adjusted gross income (MAGI). If you are a single filer or filing jointly, the IRS publishes a phase-out range each year, and a full contribution is allowed only below the bottom of that range. Check your eligibility before comparing balances.

A Dental Hygienist Tests a Traditional vs. Roth IRA Calculator at Age 41

A 41-year-old dental hygienist wants to know where her next $5,400 should go before she decides on a retirement account for the next 26 years. Her payroll stub puts her in the 22% federal bracket, and she already has $38,420 in a rollover balance she can place in either type of IRA. Her clinic offers a small pension, so she expects to land in the 24% bracket once pension payments and withdrawals stack together.

She opens the calculator and enters the figures one by one:

• Current age 41, retirement age 67
• Starting balance $38,420 and a yearly contribution of $5,400
• Annual return of 5.8%, matching the conservative bond-heavy mix she holds
• Tax rate today 22%, tax rate in retirement 24%

The calculator grows the Traditional side to $476,576 before tax, then takes 24% to leave $362,198. The Roth side starts with $29,968 and adds $4,212 a year, because 22% of every pre-tax dollar is paid up front, and it ends at $371,729 with nothing owed on withdrawal. The Roth account comes out $9,532 ahead.

That gap only holds if her bracket really climbs. She reruns the comparison with the retirement rate changed to 22% and the two balances tie at $371,729. Changing it to 20% hands the Traditional account the same $9,532 lead. Because her pension is the one input she cannot control, she reads the result as a vote for diversification: the new $5,400 goes into a Roth IRA this year, and she repeats the comparison each January once the pension statement arrives. That single rerun, with one input changed, is what turns the projection into a decision.

Reading Your Roth IRA Calculator Result

The output is a comparison, not a forecast. Because it relies on hypothetical returns and tax rates, treat the gap between the two balances as a signal about direction, and the dollar amount as an estimate that moves with every assumption.

Tax bracket today versus tax bracket later

If you expect a lower bracket in retirement, which is common once a salary stops, the Traditional account usually comes out ahead. If you expect a higher bracket, perhaps because your career income is still climbing or because tax rates rise, the Roth tends to win. The tie point in the worked example is exactly 24%, the rate you pay today.

Annual rate of return and time horizon

In this tool, raising the annual rate of return or lengthening the time horizon scales the Traditional and Roth balances together, so it raises the dollar gap between the two results but does not change which account wins. Only a change in tax rates flips the winner. That is why retirement age and return matter less to the decision than the two brackets.

A cautious way to hedge

Nobody knows their future tax situation. If the winner flips between your low and high retirement-rate runs, many savers split contributions between both accounts, or switch to a Roth in lower-income years. A financial planner or tax advisor can model your retirement income sources, including pensions, Social Security and a general investment account, which this tool deliberately leaves out.

Traditional vs. Roth IRA Calculator FAQs on Savings and Taxes

These answers cover the questions people raise most often when they compare a Roth against a Traditional account for their retirement strategy.

Can I contribute to both account types?

Yes. You can fund both in the same year as long as your combined contribution stays under the annual IRS limit, and you are eligible under the rules for each one.

Does a bank or brokerage change the result?

The calculator only asks for a rate of return, so the account type decides the tax treatment, not the bank or brokerage holding it. What differs between providers is the investing choices, fees and risk of the funds inside, which affect your rate of return and therefore your future value.

What should I enter if I am unsure about my retirement tax rate?

Run the calculator three times with a low, medium and high rate. If the same account wins every time, the choice is easy; if the winner flips, you have found the tax-bracket risk that a split strategy can reduce. For wealth planning that spans pensions and several accounts, bring the results to a financial advisor.