Roth IRA Calculator
Roth IRA Growth
Results
| Roth IRA Balance at Retirement | — |
|---|---|
| Traditional IRA Balance (pre-tax) | — |
| Traditional IRA After Tax | — |
| Comparison | — |
How to Use This Roth IRA Calculator
The Roth vs traditional debate always comes down to tax rates now vs later—and whether you'd actually invest the tax savings from a deduction. This calculator runs both paths side by side with your marginal rates and shows after-tax spendable dollars at retirement.
- Enter Roth IRA balance and annual contribution. After-tax dollars going into the account each year.
- Set years until retirement and expected return. Same growth assumption applies to both Roth and traditional scenarios.
- Enter current and retirement marginal tax rates. Current rate affects traditional deductibility value; retirement rate taxes traditional withdrawals.
- Press Calculate. Review Roth balance, traditional pre-tax balance, traditional after-tax value, and which account type shows an advantage.
Model traditional IRA growth alone with the IRA Calculator, or workplace deferrals with the 401K Calculator.
Roth IRA Formulas and Practical Applications
Roth contributions are made with after-tax dollars but qualified withdrawals are tax-free. Traditional contributions get a tax deduction now, but withdrawals are taxed—fair comparison requires equal out-of-pocket cost today.
Equal out-of-pocket comparison
If you contribute $7,000 to Roth after tax, the traditional side assumes you could have directed the tax savings into the account—nominal traditional contribution ≈ $7,000 × (1 + current tax rate) when fully deductible. At withdrawal, traditional balance × (1 − retirement tax rate) compares to Roth.
When each wins
Lower tax rate today than in retirement → Roth often ahead. Higher rate today → traditional may win if you truly reinvest the tax break. Equal rates and full deductibility → roughly a wash in this model.
Frequently Asked Questions
How does this Roth vs Traditional comparison work?
Roth uses after-tax contributions growing tax-free. Traditional assumes equivalent pre-tax buying power (higher nominal contributions from the tax deduction), then taxes the balance at withdrawal using your retirement tax rate.
When does Roth usually win?
Roth tends to win when your retirement tax rate is higher than today's rate, because you paid tax upfront at a lower bracket.
What tax rates should I enter?
Use marginal tax rates: current rate on the last dollar you earn now, and expected marginal rate on IRA withdrawals in retirement.
Are contribution limits enforced?
No. Enter planned annual contributions; IRS limits and income phase-outs are not modeled.
Does Roth show after-tax or pre-tax balance?
Roth balance shown is spendable after tax. Traditional shows both pre-tax balance and after-tax value after applying the retirement tax rate.