Roth vs. Traditional 401(k) Calculator

What this estimate assumes

• It assumes your current and future marginal tax rates stay accurate to what you enter — actual future tax brackets and your actual future income are both unknowns this calculator can't predict.
• It compares a Traditional contribution's pretax equivalent of the same today's-dollars cost against a Roth's after-tax contribution — not simply the same dollar figure contributed to each. This is the economically fair comparison: since a Traditional contribution is deducted before tax, the same amount of money leaving your paycheck today buys a larger pretax contribution in a Traditional account than it would as an after-tax contribution to a Roth. Comparing equal dollar amounts instead would understate what Traditional actually lets you contribute for the same cost, and overstate Roth's advantage.
• It ignores required minimum distributions, early withdrawal rules, and other account-specific mechanics that apply once money is actually withdrawn.
• It assumes a single lump annual contribution compounding at a constant annual rate of return, rather than modeling paycheck-by-paycheck contributions or variable market returns.

How to use this calculator

1. Enter the amount you're willing to have come out of your take-home pay each year in Annual contribution, after-tax cost ($) — think of this as what a Roth contribution of this size would actually cost you today.
2. Enter how many years are left until you plan to retire and start drawing on the account in Years until retirement.
3. Enter a realistic long-run average in Expected annual investment return (%) — a diversified stock/bond portfolio has historically returned somewhere in the 6–8% range over long periods, though any individual stretch can vary widely.
4. Enter your current tax bracket in Your current marginal tax rate (%) — this is the rate you'd save on a Traditional contribution right now, not your average tax rate.
5. Enter your best guess for your tax bracket once you're retired and withdrawing money in Expected marginal tax rate in retirement (%).
6. Click Compare Roth vs. Traditional to see which account type comes out ahead, and by how much, on an apples-to-apples basis.

Worked example

Take the calculator's own defaults: a $10,000/year after-tax cost, 25 years until retirement, a 7% expected annual return, a 24% current marginal tax rate, and an 18% expected marginal tax rate in retirement.

Because this model uses one contribution per year rather than monthly deposits, growth compounds annually. The future value of $10,000 contributed every year for 25 years at 7% uses the standard annuity formula: FV = contribution × ((1 + r)^years − 1) ÷ r. The key number to get right is (1.07)^25. Computing it carefully — by repeated squaring (1.07² = 1.1449, 1.07⁴ ≈ 1.3108, 1.07⁸ ≈ 1.7182, and combining powers up through 1.07²⁵) and cross-checking with the exponential identity (1.07)^25 = e^(25 × ln 1.07) ≈ e^1.6915 ≈ 5.427 — both methods agree: (1.07)^25 ≈ 5.4274.

That makes the annuity factor (5.4274 − 1) ÷ 0.07 ≈ 63.25. Contributing the same $10,000/year after-tax cost to a Roth every year for 25 years grows to 10,000 × 63.25 ≈ $632,490, and since Roth withdrawals are tax-free, that's also roughly what you'd actually have to spend.

For Traditional, the same $10,000 of take-home cost today buys a bigger pretax contribution, because that contribution reduces this year's taxable income: pretaxEquivalent = 10,000 ÷ (1 − 0.24) = 10,000 ÷ 0.76 ≈ $13,158/year. Growing that larger annual contribution for 25 years at the same 63.25 factor gives 13,158 × 63.25 ≈ $832,240 before tax. Applying the 18% retirement tax rate on withdrawal — 832,240 × (1 − 0.18) — leaves an after-tax value of roughly $682,420.

Comparing the two after-tax results: Traditional (≈$682,420) actually comes out ahead of Roth (≈$632,490) by about $49,930 in this example — even though Roth withdrawals are tax-free and Traditional withdrawals aren't. That's because the 6-point gap between the 24% current rate and the 18% retirement rate is large enough that the bigger pretax contribution Traditional allows today outweighs paying tax on the way out later. If the gap between those two rates were smaller — or reversed, with a higher expected rate in retirement than today — the advantage would shrink or flip toward Roth instead.

Frequently asked questions

Why isn't contributing the same dollar amount to each account a fair comparison?

Because a Traditional contribution is made with pretax dollars and a Roth contribution is made with after-tax dollars, the same dollar figure costs you different amounts out of your take-home pay. Contributing $10,000 to a Roth actually costs you $10,000 today, but contributing $10,000 to a Traditional account only costs you $10,000 minus the tax you would have paid on it — so your paycheck takes a smaller hit. To compare them fairly, you need to hold today's real cost constant and let the Traditional contribution be larger, which is what this calculator does.

What if I don't know my tax rate in retirement?

Nobody knows this for certain, since it depends on future tax law and how much other income you'll have in retirement. A reasonable starting point is to assume a similar or somewhat lower rate than your current bracket, since many retirees have less taxable income than during their working years. Try running the calculator with a range of retirement rates — a few percentage points above and below your best guess — to see how sensitive the result is before deciding.

Does this account for an employer match?

No — this calculator only compares your own contribution across the two account types. An employer match is typically deposited as pretax (Traditional) money regardless of which type you contribute to, and it's free money either way, so it doesn't change the Roth-vs-Traditional decision for your own contribution. Just make sure you're contributing enough to get the full match before optimizing between account types.

What about early withdrawal penalties and required minimum distributions (RMDs)?

This calculator assumes money stays invested until the retirement horizon you enter and ignores penalties, RMD rules, and the other account-specific mechanics that apply once money is actually withdrawn. Traditional accounts currently require minimum distributions starting at a set age and tax every withdrawal as ordinary income; Roth 401(k)s have their own distinct rules. Those details matter for a real plan but are outside what this simplified growth comparison covers.

Is Traditional always better when my tax rate drops in retirement?

Generally, yes — the bigger the gap between your current tax rate and your expected retirement rate, the more the Traditional account's larger pretax contribution capacity outweighs the Roth's tax-free growth. If your retirement rate is expected to be close to or higher than your current rate, the comparison tightens and can flip toward Roth. That's exactly why this calculator asks for both rates separately rather than assuming they're the same.

Can I just split my contributions between both account types?

Yes, and many people do exactly that as a hedge against not knowing their future tax rate for certain. Splitting doesn't require this calculator to pick a single winner — you can use the result here to see which direction the math currently favors, then decide how much of a tilt toward that account type feels right for your own plan.