Roth vs Pre-Tax Contribution Calculator

About this calculator

The choice between a Roth and a pre-tax (traditional) retirement contribution comes down to when you pay tax: a pre-tax contribution to a 401(k) or traditional IRA lowers your taxable income today but is taxed as ordinary income on withdrawal, while a Roth contribution is made with already-taxed money and grows completely tax-free. A fair side-by-side comparison has to account for what happens to the tax savings the pre-tax option generates — the honest comparison invests that up-front tax refund in a taxable account rather than spending it, since otherwise the pre-tax path looks artificially better.

The result usually comes down to your current tax rate versus your expected tax rate in retirement: if you expect to be in a lower bracket later, pre-tax tends to win; if you expect a similar or higher bracket, Roth tends to come out ahead because none of the eventual withdrawal is taxed.

This calculator takes your contribution amount, current and future tax rates, and expected investment return, and shows which account leaves you with more spendable money.