🏦 Roth vs Traditional IRA Calculator
The key question: will your tax rate be higher now or in retirement? This calculator shows you side-by-side which IRA account type puts more after-tax money in your pocket at retirement.
Your Situation
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ROTH IRA
Pay taxes now, withdraw tax-free
$0
After-tax retirement value
TRADITIONAL IRA
Tax deduction now, pay taxes later
$0
After-tax retirement value
Roth Balance at Retirement
$0
Traditional Balance
$0
Total Contributions
$0
Total Growth
$0
Roth vs Traditional IRA: Key Differences
| Feature | Roth IRA | Traditional IRA |
|---|---|---|
| Tax treatment | After-tax contributions | Pre-tax contributions |
| Tax on withdrawals | Tax-free (in retirement) | Ordinary income tax |
| 2024 contribution limit | $7,000 ($8,000 if 50+) | $7,000 ($8,000 if 50+) |
| Income limit (2024) | $161k–$176k (single) | No limit for contribution |
| Required Minimum Distributions | None during lifetime | Starting at age 73 |
| Early withdrawal | Contributions anytime | 10% penalty before 59½ |
| Best if | Tax rate rises in retirement | Tax rate falls in retirement |
The Simple Rule
Choose ROTH if: Current tax rate < Expected retirement tax rate (or same)
Choose TRADITIONAL if: Current tax rate > Expected retirement tax rate
When equal rates: Roth wins due to no RMDs and tax-free compounding
Choose TRADITIONAL if: Current tax rate > Expected retirement tax rate
When equal rates: Roth wins due to no RMDs and tax-free compounding
Can I contribute to both a Roth IRA and a 401(k)? +
Yes! A Roth IRA and a 401(k) are separate accounts with independent contribution limits. You can max out both in the same year: $7,000 in a Roth IRA + $23,000 in a 401(k) = $30,000 in tax-advantaged savings annually (2024 limits). This is a powerful wealth-building combination, especially if your employer offers a 401(k) match.
What is a backdoor Roth IRA? +
High earners above the Roth IRA income limit ($161k single/$240k married in 2024) can use a "backdoor Roth" strategy: contribute to a non-deductible Traditional IRA, then convert it to a Roth IRA. This is legal and widely used, but consult a tax advisor about the pro-rata rule if you have other Traditional IRA balances.
What happens if I exceed the Roth IRA income limit? +
If your MAGI exceeds the phase-out range ($146k–$161k for single filers in 2024), your Roth IRA contribution limit is reduced. Above the upper limit, you cannot contribute directly. Options include the backdoor Roth strategy or maxing out a Roth 401(k) if available through your employer.