Roth vs Traditional 401(k) Calculator
Pre-tax now or tax-free later, which wins.
Better choice: Traditional
$17,401
After-tax difference at retirement
Roth ending balance
$661,226
tax-free
Traditional after tax
$678,626
from $870,034 pre-tax
This compares equal real contributions. Traditional assumes you invest the tax savings, scaling the contribution to 1/(1 - current tax). Roth wins when the retirement bracket is higher than today, traditional wins when it is lower.
About
If your tax rate stays the same, both end up identical. If you'll be in a higher bracket in retirement, Roth wins. If lower, Traditional wins. This calculator runs both side by side based on your numbers.
How to use
- Enter your annual contribution and years until retirement.
- Enter your current and expected retirement tax rates.
- Enter the expected annual return.
- See after-tax balances for both.
FAQ
Which should I pick if I'm not sure?+
Many people split. Roth in your 20s and 30s when rates are usually lowest, Traditional later. Mixing also gives flexibility in retirement.
Does the Roth cap apply differently?+
401(k) contribution caps are the same dollar amount for Roth and Traditional. Roth IRAs have income limits Traditional doesn't.