Roth vs. Traditional IRA
Tax now or tax later. Compare the after-tax retirement balance of each account for your income, age and expected tax rate, with backdoor Roth guidance if your income is above the limit.
Your situation
$
≈ $95,000/yr · $7,917/mo · $45.67/hr
$
Current age yr
18 yr70 yr
Retirement age yr
50 yr80 yr
Expected annual return%
1%15%
Estimated retirement tax rate%
10%37%
Enter your situation and select Compare Roth vs. Traditional to see the after-tax outcome of each account.
How this is calculated
We grow the same contribution in a Roth (after-tax) and a Traditional (pre-tax) account and compare the after-tax money you’d actually keep.
The steps
- Roth: contribution is taxed now, grows tax-free, withdrawn tax-free.
- Traditional: contribution is pre-tax (or deductible), grows tax-deferred, then withdrawals are taxed at your retirement rate.
- Compare the net after-tax balances; the better choice hinges on your tax rate now vs. in retirement.
Assumptions
- A constant growth rate; the tax rates you enter for now and retirement.
- The "deduction saves you now" figure is measured on taxable income after the standard deduction.
Good to know
- Future tax rates are unknown; ignores state-of-residence changes.
Related resources
Educational disclaimer. Everything on WealthSerene.com is educational and is not investment advice. Projections and calculations are illustrative; actual results depend on market conditions, your situation and factors outside this tool’s scope. For a decision specific to your situation, consult a qualified financial professional. For tax advice, consult a CPA or Enrolled Agent. View full disclosures