Roth vs Traditional IRA Calculator
Compare Roth and Traditional IRA for your retirement savings strategy. See how your current and retirement tax rates affect which account type gives you more after-tax income in retirement.
Determines whether the IRC §219(g) deduction phase-out applies to your Traditional IRA contribution above a MAGI threshold. Leave checked if unsure — most working filers with access to a 401(k) are covered.
Your Traditional IRA contribution is treated as fully deductible. Check IRS Publication 590-A if your situation involves a spouse's plan coverage or partial-year coverage.
Other income in retirement (Social Security, pensions, etc.)
Years to Retirement
35Balance at Retirement
$1,050,615Recommendation
Traditional IRA| Traditional IRA | Roth IRA | |
|---|---|---|
| Annual Contribution | $7,000 | $7,000 |
| Tax Savings Now (per year) | $1,540 | $0 |
| Out-of-Pocket Cost (per year) | $5,460 | $7,000 |
| Balance at Retirement | $1,050,615 | $1,050,615 |
| Annual Withdrawal (4% rule) | $42,025 | $42,025 |
| Tax on Withdrawal | $7,596 | $0 |
| Bonus from Reinvested Tax Savings | $9,245 | $0 |
| Total After-Tax Annual Income | $43,675 | $42,025 |
"Bonus from Reinvested Tax Savings" assumes the Traditional IRA's upfront tax savings are invested each year at the same return rate and drawn down at retirement using the same 4% rule — this is what makes an equal-dollar-contribution comparison fair, and it is included in the recommendation above.
Traditional IRA provides $1,650 more in after-tax annual retirement income.
Frequently asked questions
What is the difference between Roth and Traditional IRA?
With a Traditional IRA, contributions may be tax-deductible now, but withdrawals in retirement are taxed as ordinary income. With a Roth IRA, contributions are made with after-tax dollars, but qualified withdrawals in retirement are completely tax-free. The best choice depends on whether you expect your tax rate to be higher or lower in retirement.
What is the IRA contribution limit for 2025?
For 2025, you can contribute up to $7,000 per year to your IRAs ($8,000 if you are age 50 or older). This limit applies to the total of all your Traditional and Roth IRA contributions combined. Roth IRA contributions may be reduced or eliminated at higher income levels due to phase-out rules.
What is the IRA contribution limit for 2026?
For 2026, the limit rises to $7,500 per year ($8,600 if age 50 or older) — the first-ever inflation increase to the IRA age-50+ catch-up, per IRS Notice 2025-67. As in 2025, this applies to your combined Traditional and Roth contributions.
When is a Roth IRA better than Traditional?
A Roth IRA is generally better if you expect to be in a higher tax bracket in retirement than you are now, such as early in your career when income is lower. Roth IRAs also have no required minimum distributions (RMDs) during your lifetime, making them a powerful tool for estate planning and long-term tax-free growth.
Can I contribute to both a Roth and Traditional IRA?
Yes, you can contribute to both a Roth and Traditional IRA in the same year, as long as your total combined contributions do not exceed the annual limit of $7,000 ($8,000 if age 50+) for 2025. Many people split contributions between both types to diversify their tax exposure in retirement.
Sources
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