Roth vs Traditional Calculator – Which Saves More Tax?

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The core trade-off

The question is simply when you pay tax:

• Traditional: contributions are pre-tax, so you save tax now. Withdrawals in retirement are taxed as income.
• Roth: contributions are after-tax, so you pay tax now. Qualified withdrawals, including all the growth, are tax-free.

Mathematically, if your tax rate is the same now and in retirement, both end up equal: paying 22% now or 22% later on a larger balance gives the same after-tax amount. The difference comes from changes in your tax rate and from what you do with the tax savings.

Tax rate now vs later

• Expect a lower tax rate in retirement? Traditional usually wins: you deduct at a high rate and pay at a lower one.
• Expect a higher or similar rate? Roth usually wins, especially early in your career, in a low bracket.

Use your marginal rate now (federal bracket plus state) and your expected average rate on withdrawals in retirement. Many retirees pay less, because income drops and the standard deduction and 10% and 12% brackets shelter the first withdrawals. But large traditional balances, required minimum distributions from age 73 (75 for those born in 1960 or later), Social Security taxation and moving to a higher-tax state can push the retirement rate up.

The calculator's break-even rate is the retirement rate at which both choices are equal. In the default example (27% now, 7% return, 30 years), it is about 24%: expect to pay more than that in retirement and Roth wins.

Employer match is always pre-tax

Your employer's matching contributions go into the traditional (pre-tax) side of your 401(k), even if you choose Roth for your own money. The SECURE 2.0 Act lets plans offer Roth matching, but the match is then taxable income to you when it's made. So almost everyone ends up with some pre-tax savings, which is one reason many people pick Roth for their own contributions.

Using both

You don't have to choose one. Splitting contributions gives you tax diversification: in retirement you can take taxable withdrawals up to the top of a low bracket and Roth money above it, keeping your tax rate down. Common strategies:

• Roth while your income is low or in the 12% bracket; traditional in peak earning years (24% and up).
• Traditional 401(k) for the deduction, plus a Roth IRA (or backdoor Roth) for tax-free money.
• Roth conversions in low-income years, such as early retirement before Social Security.

Examples

$10,000 a year for 30 years at 7%, same contribution with the tax savings invested (15% capital gains tax):

Roth wins when your rate stays the same or rises; traditional wins when it falls by a few points or more. If you compare by the same take-home cost instead, both are exactly equal when the rates are the same.

Results are estimates, not tax or investment advice. Future tax rates and laws can change. Last reviewed: November 1, 2026.