Roth vs Pre-Tax Calculator

About this calculator

Retirement savers choosing between a Roth account (contributions taxed now, withdrawals tax-free) and a traditional/pre-tax account (contributions deducted now, withdrawals taxed later) are really making a bet on their tax rate today versus in retirement. This calculator grows the same contribution under both scenarios at your expected investment return, applies your current tax rate to the Roth contribution up front and your expected retirement tax rate to the pre-tax withdrawal at the end, and compares the two final after-tax balances.

The math has a well-known symmetry: if your tax rate is identical now and in retirement, both accounts produce the same after-tax result, so the deciding factor is really whether you expect to be in a higher or lower tax bracket in retirement than you are today. Financial planners, and anyone deciding how to split contributions between a 401(k)/traditional IRA and a Roth 401(k)/Roth IRA, use this comparison to make an informed choice rather than guessing.