Comparison explorer
Roth or traditional?
Two numbers do most of the work: the rate you would pay on the money now, and the rate you expect when you take it out. This compares equal pre-tax cost and taxes the whole traditional balance at the end.
Your marginal rate today
24%
The rate on your next dollar of income, federal plus state.
Rate you expect in retirement
22%
A guess is fine. Many people land lower, but not all.
Traditional comes out ahead on these numbers
Deducting at 24% today and paying 22% on withdrawal leaves about $814 more after tax, because the deferred tax is charged at a lower rate.
Roth, after tax
$30,936
Traditional, after tax
$31,750
How this was calculated
- Both sides start from the same $7,500 of pre-tax income, so the comparison is like for like.
- Traditional: the full $7,500 is invested, grows to $40,706 over 25 years at 7%, and the entire balance is taxed at 22% on withdrawal.
- Roth: 24% is paid in tax first, leaving $5,700 invested, which grows to $30,936 and is not taxed again.
What this illustration cannot capture
- Withdrawals are not taxed at one flat rate. They pass through the brackets, so some of a traditional withdrawal is often taxed well below your top rate.
- Traditional withdrawals raise taxable income, which can pull more Social Security into tax, lift Medicare IRMAA premiums, and reduce ACA subsidies.
- State tax matters: some states exempt retirement income entirely, and you may not retire in the state you work in now.
- Traditional balances face required minimum distributions later; Roth IRAs do not for the original owner.
- Holding some of each hedges against tax law changing, which it does.
Illustration uses $7,500 of pre-tax income — the 2026 IRA limit — growing at 7% a year. Change any assumption above and the figures move with it.
A traditional contribution skips tax now and pays it on withdrawal — on the contribution and everything it earned. A Roth contribution pays tax now and nothing later. If the two rates were identical and you committed the same pre-tax income to each, they would finish in exactly the same place; the difference comes entirely from which rate is higher.
People early in a career, in a low-income year, or expecting to earn more later tend toward Roth. People at peak earnings, especially in a high-tax state they plan to leave, tend toward traditional. Holding some of each is a legitimate hedge rather than indecision.
This is one decision. See the whole picture.
The same engine runs a short guided journey that puts this decision in order against everything else competing for the money.
Common questions
Where these figures come from
2026 figures · checked 2026-08-18- IRSIRS — 401(k) limit increases to $24,500 for 2026, IRA limit increases to $7,500Employee deferral, IRA limits, income phase-out ranges
- IRSIRS — Retirement topics: catch-up contributionsAge 50+, age 60–63, and Roth catch-up wage rules
Statutory limits are taken from these publications. Economic assumptions — expected returns, emergency-fund targets — are ours, are shown wherever they are used, and are not sourced from anyone.
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