Tools → Roth vs. Traditional IRA
Roth vs. Traditional IRA
Understand your Roth-vs-Traditional choice. Make your own decisions. Take control of your future.
Tax now or tax later? Model your retirement wealth under both options, including backdoor Roth guidance.
Your situation
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- Roth: contribution is taxed now, grows tax-free, withdrawn tax-free.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: All content on WealthSerene.com is for educational purposes only and does not constitute investment advice. Projections and calculations are illustrative — actual results will vary based on market conditions, your specific situation, and many factors outside this tool’s scope. Always consult a qualified financial professional for advice specific to your situation. For tax advice, consult a CPA or Enrolled Agent. View full disclosures →