Roth vs. Traditional Retirement Tax Savings Calculator
Use this tool to determine whether a **Roth** (after-tax contribution, tax-free withdrawal) or **Traditional** (pre-tax contribution, taxed withdrawal) retirement account will leave you with more money after taxes.
Input Your Financial Estimates
Tax-Adjusted Net Wealth at Retirement
Traditional Account (Pre-Tax)
Roth Account (After-Tax)
Understanding the Tax Trade-Off
The fundamental difference between Roth and Traditional accounts lies in when you pay the tax: **now** or **later**.
The Traditional Advantage (Tax Now is High)
If your **current** tax bracket is **higher** than your expected retirement tax bracket (which is common, as income usually drops in retirement), the Traditional account typically wins. You get an immediate tax break by deducting the contribution, and you pay a lower tax rate on the withdrawals later.
The Roth Advantage (Tax Later is High)
If you expect your **retirement** tax bracket to be **higher** than your current one (common for those early in their career or who expect significant non-retirement income), the Roth account is usually superior. You pay the tax at your lower current rate, and all the decades of growth are tax-free.
The difference between the two final numbers in the calculator is due to two variables: the tax rate you pay in the accumulation phase, and the tax rate you pay in the distribution phase. A 10-20% difference in tax rates applied to a large nest egg can result in hundreds of thousands in net wealth difference.
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