Roth vs. Traditional IRA Calculator

Same investment, two different tax deals

Traditional and Roth IRAs hold the same investments and grow by the same market returns — the only real difference is when you pay tax on the money. Traditional contributions reduce your taxable income today, and you pay tax on withdrawals in retirement. Roth contributions come from money you’ve already paid tax on, and qualified withdrawals in retirement are entirely tax-free. Whichever one nets you more spendable money depends on a single question: is your tax rate higher now or in retirement?

Key terms

Contribution limit

The 2026 IRA contribution limit is $7,500 ($8,600 if you’re 50 or older), shared across your Traditional and Roth IRAs combined — not $7,500 to each separately.

Income phase-out

Roth IRA eligibility phases out at higher incomes. For 2026, single and head-of-household filers phase out between $153,000 and $168,000 of modified AGI; joint filers phase out between $242,000 and $252,000. Above the top of the range, you can’t contribute to a Roth directly at all.

Required Minimum Distributions (RMDs)

Traditional IRAs require you to start withdrawing a minimum amount annually once you reach the RMD age (73 for most people under current rules). Roth IRAs have no RMDs during the original owner’s lifetime, letting the account keep growing tax-free indefinitely if you don’t need the money.

Why the math above sometimes surprises people

If your tax bracket today matches your expected bracket in retirement, the two accounts produce the identical after-tax outcome for the same contribution amount — that’s not a coincidence, it falls directly out of the math. Roth pulls ahead when you expect to be in a higher bracket in retirement than you are now — common for younger earners early in their careers, or for anyone who expects retirement income (Social Security, pensions, RMDs, part-time work) to push them into a higher bracket than their current salary suggests. Traditional pulls ahead when you expect a lower bracket in retirement, which is the more common assumption for people already in peak earning years.

Roth vs. Traditional, side by side

Roth IRA

Tax-free withdrawals in retirement, including all investment growth
No Required Minimum Distributions during your lifetime
Contributions (not earnings) can be withdrawn any time without penalty
No upfront tax deduction — contributions come from already-taxed income
Income phase-out can block direct contributions for high earners

Traditional IRA

Reduces your taxable income in the year you contribute
No income limit on the ability to contribute (deductibility can phase out if you’re also covered by a workplace plan)
Withdrawals in retirement are taxed as ordinary income
Required Minimum Distributions start at age 73, whether you need the money or not
Early withdrawals before 59½ typically trigger a 10% penalty plus tax

The “frees up today” line is doing real work

A Traditional contribution doesn’t just defer tax — it reduces this year’s tax bill by your contribution times your current bracket. The Statement above shows that dollar figure explicitly. Some people invest that freed-up cash separately, which improves Traditional’s real-world result beyond what a simple side-by-side balance comparison shows. This calculator compares the two accounts on equal contribution terms; it doesn’t assume you invest the tax savings elsewhere, which is a legitimate refinement if you’re disciplined enough to actually do it rather than spend it.

Why “I don’t know my future tax rate” isn’t a reason to skip this

Nobody can predict tax policy or their own income decades out with certainty, but that’s not a reason to default to indecision — it’s a reason to diversify. Many financial planners recommend holding both account types when eligible, giving you flexibility to draw from whichever one is more tax-efficient in a given retirement year based on your actual bracket at the time. Treat this calculator’s inputs as your best estimate, not a certainty you need to lock in for thirty years.

Using this calculator

Your current bracket is knowable — use our Take-Home Pay calculator to find it if you’re not sure. Your retirement bracket is a genuine estimate; a common starting assumption is that it’ll be similar to or somewhat lower than your working-years bracket, but adjust it if you have a specific reason to expect otherwise, like a pension or a lower cost-of-living retirement location.

This article is for educational purposes only and isn't legal, financial, or tax advice. See our Disclaimer for details.

Frequently asked questions

Can I have both a Roth and Traditional IRA?

Yes, you can hold and contribute to both in the same year. The catch is your total combined contribution across both accounts still can't exceed the annual IRA limit — $7,500 for 2026 ($8,600 if you're 50 or older) — split however you choose between the two.

What's the income limit for Roth IRA contributions in 2026?

For single and head-of-household filers, the ability to contribute directly phases out between $153,000 and $168,000 of modified AGI. For joint filers, it phases out between $242,000 and $252,000. Above the top of the range, direct Roth contributions aren't allowed at all, though a backdoor Roth conversion is a separate strategy some high earners use instead.

Can I convert a Traditional IRA to a Roth?

Yes, this is called a Roth conversion, and there's no income limit on who can do it, unlike direct Roth contributions. You'll owe ordinary income tax on the converted amount in the year of the conversion, since Traditional funds haven't been taxed yet, but the money then grows tax-free going forward under Roth rules.

Which is better if I'm not sure about my future tax bracket?

Many financial planners recommend holding both account types when you're eligible for each, giving you flexibility to draw from whichever is more tax-efficient in a given retirement year. If you have to pick just one and genuinely don't know, a common approach is to split contributions between both rather than betting everything on a single guess about future tax policy.