Enter your age, annual contribution, expected investment return, current tax rate, and expected retirement tax rate to compare Traditional IRA vs. Roth IRA after-tax balances.
How to use this calculator
Enter your current age and target retirement age.
Enter your annual contribution amount (IRS annual limit is $7,000 for under age 50, $8,000 for age 50+).
Set your expected annual investment growth rate.
Enter your current marginal tax bracket and expected retirement tax bracket.
Compare your final after-tax nest egg in a Roth IRA versus a Traditional IRA.
Formula & method
Roth vs. Traditional IRA Tax Growth Equations
Gross Value = Annual Contribution × [ ((1+r)^n − 1) / r ] · Roth After-Tax = Gross Value · Traditional After-Tax = Gross Value × (1 − Retirement Tax Rate)
r = annual return rate, n = years until retirement.
Example
$7,000/yr over 35 yrs @ 7% return → $967,634 gross balance. Roth IRA yields $967,634 tax-free vs Traditional IRA $822,489 (after 15% tax).
Key insights
Roth IRAs grow 100% tax-free and allow completely tax-free withdrawals in retirement, making them superior if you expect your tax rate to stay equal or rise.
Traditional IRAs provide immediate up-front tax deductions today, making them advantageous if your tax bracket drops significantly in retirement.
Roth IRAs have no Required Minimum Distributions (RMDs) during the owner's lifetime, allowing wealth to compound indefinitely or pass tax-free to heirs.
You can contribute to both a Roth and Traditional IRA, but your combined total contribution across all IRAs cannot exceed the annual IRS limit.
How to interpret your result
Roth IRA After-Tax Balance
The exact net dollar amount available for spending in retirement (zero tax owed upon withdrawal).
Traditional IRA After-Tax Balance
The net portfolio value remaining after deducting income taxes owed upon withdrawal in retirement.
Tax Strategy Recommendation
Mathematically identifies whether tax-deductible today (Traditional) or tax-free tomorrow (Roth) produces higher net wealth.
Frequently asked questions
What is the difference between a Roth IRA and a Traditional IRA?
Traditional IRAs offer tax deductions today with taxable withdrawals in retirement. Roth IRAs are funded with after-tax money today but offer 100% tax-free growth and tax-free withdrawals in retirement.
What is the maximum IRA contribution limit for 2026?
The annual contribution limit is $7,000 for individuals under age 50, and $8,000 for individuals age 50 and older (including the $1,000 catch-up contribution).
Can I withdraw my contributions from a Roth IRA early without penalty?
Yes, you can withdraw your principal contributions (not earnings) from a Roth IRA at any time, for any reason, without taxes or penalties.
Related calculators
Retirement Calculator — Estimate your future retirement nest egg, sustainable 4% rule monthly income, and target savings goal.