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.
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 | $7,823 | $0 |
| After-Tax Annual Income | $34,202 | $42,025 |
Traditional IRA provides $1,422 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.
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
Related insights
Use these guides for rule explanations, planning context, and follow-up questions beyond the calculator result.