Roth vs Traditional IRA
See which IRA wins after taxes — including the side-fund analysis for the Traditional tax savings.
Your Information
2026 limit: $7,500
Winner: 🏆 Roth IRA
The Roth IRA wins by $8,300 after taxes, assuming you reinvest the upfront tax savings from Traditional.
Your retirement tax rate of 22% is lower your current rate of 24% — this is the key driver.
Roth IRA
$1.11M
Tax-free at retirement. No RMDs.
- Pre-tax balance
- $1,109,351
- Taxes owed
- $0
- After-tax
- $1,109,351
Traditional IRA + Side Fund
$1.10M
Pre-tax growth, taxed on withdrawal.
- Traditional pre-tax
- $1,109,351
- After 22% tax
- $865,294
- Side fund (tax savings)
- $235,758
- Total after-tax
- $1,101,051
Comparison
Key Differences
| Feature | Roth IRA | Traditional IRA |
|---|---|---|
| Contribution tax | Post-tax (no deduction) | Pre-tax (deductible) |
| Withdrawal tax | Tax-free | Taxed as ordinary income |
| RMDs | None during your lifetime | Required at age 73 |
| Income limits | $165k single / $246k MFJ | No income limit (deduction phases out) |
| Best when | Tax rate ↑ in retirement | Tax rate ↓ in retirement |
About this tool
Compare a Roth IRA and a Traditional IRA on an apples-to-apples after-tax basis. The calculator models the Traditional + side fund correctly: when you contribute pre-tax, the tax savings get invested in a taxable account at the same return, then taxed at long-term capital gains rates on withdrawal. This is the only fair comparison.
How to use it
Quick steps to get the most out of this utility.
- 1
Enter your tax rates
Current marginal rate (federal + state) and your expected retirement rate.
- 2
Set contribution and timeline
How much per year and how many years until retirement.
- 3
Read the verdict
The winner is the option with the higher after-tax balance at retirement.
- 4
Sanity-check with the table
The comparison table shows the structural differences (RMDs, income limits, etc.) that matter beyond the math.
Why most simple IRA calculators are wrong
A common mistake is comparing the gross balance of a Traditional IRA to a Roth IRA without accounting for the pre-tax savings. If you contribute $7,500 to a Traditional, the IRS effectively gives you back $1,800 in tax savings (at a 24% rate). If you don't reinvest that $1,800, the comparison is unfair to Traditional. This calculator assumes you reinvest the savings in a taxable account — the only honest comparison.
The forgotten tiebreakers
When the math is close, the tiebreakers matter: Roth has no RMDs, so you can let it compound indefinitely or leave it to heirs. Roth contributions can be withdrawn anytime tax-free, making it more flexible if you might need the money before 59½. Traditional gives you the deduction now, which can drop you into a lower bracket and unlock other tax benefits.
Frequently asked questions
What is the difference between a Roth IRA and a Traditional IRA?+
Traditional IRA contributions are pre-tax (deductible) and withdrawals are taxed as ordinary income. Roth IRA contributions are post-tax and qualified withdrawals (after age 59½) are completely tax-free, including all growth.
What are the 2026 IRA contribution limits?+
For 2026, the IRA contribution limit is $7,500 for those under 50 and $8,500 for those 50 and older (with the $1,000 catch-up). This is the combined limit across all your IRAs (Roth + Traditional).
Are there income limits for Roth IRA contributions?+
Yes. For 2026, single filers with modified AGI above $165,000 phase out, and Married Filing Jointly above $246,000 phase out. High earners can use the backdoor Roth strategy: contribute to a Traditional IRA, then convert to Roth.
Which is better, Roth or Traditional?+
It depends on your tax rate now vs in retirement. If your retirement tax rate will be HIGHER than today, Roth wins (pay tax now at the lower rate). If LOWER, Traditional wins (defer tax to the lower rate). If they are equal, the result is mathematically identical.
What about Required Minimum Distributions (RMDs)?+
Traditional IRAs require you to start withdrawing minimum amounts at age 73 (RMDs), whether you need the money or not. Roth IRAs have no RMDs during your lifetime — you can leave the money to grow tax-free indefinitely or pass it to heirs.
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