401(k), IRA & Roth
Roth or traditional? The answer is in two tax rates
A Roth vs. traditional calculator that compares the same pre-tax contribution power both ways, taxed now as Roth or taxed later as traditional, at rates the client chooses.
Included in Network. 14-day trial, cancel any time.
Should I contribute to a Roth or a traditional account?
Compare your marginal tax rate now with the rate you expect when you withdraw. If today's rate is higher, traditional (pre-tax) contributions usually win; if the future rate is higher, Roth usually wins; if they are equal, the results match. Tax diversification, RMDs and heirs can tip the balance either way.
Open enrollment, when the Roth 401(k) box appears
More plans offer a Roth option, and the enrollment form asks employees to choose without much guidance. The internet's answers conflict. Clients want a way to see the trade-off in their own numbers before ticking a box they will live with for years.
What the client types into a search box
“should I choose roth or traditional 401k”
How a client works through it
Enter a pre-tax contribution
The amount of pay the client would put toward retirement before tax.
Set time and return
Years to grow and annual return.
Enter both tax rates
The marginal rate now and the expected rate in retirement.
Compare after-tax values
Roth after-tax value, traditional after-tax value and the difference.
What lands in your inbox
When a client asks your firm to review the result, the request arrives as a contact record with their inputs and results attached, by email and, on paid plans, by webhook to your CRM.
Received
Contribution, years, return and the two tax rates show how the client sees their future. A client assuming a much lower rate in retirement may be underestimating RMDs and Social Security taxation. Equal rates entered suggest a client who needs help forming a view.
Why do equal tax rates give equal results?
Roth After-Tax Value taxes the contribution now and lets it grow tax-free. Traditional After-Tax Value lets the full amount grow and taxes it at withdrawal. Multiplication is commutative, so if both rates are the same, the results are identical. Difference (Roth - Traditional) shows which wins at the rates entered.
Pre-Tax Growth and Total Contributed help explain the mechanics to clients who think a Roth is 'free money'.
Results shown: Roth After-Tax Value · Traditional After-Tax Value · Difference (Roth - Traditional) · Pre-Tax Growth · Total Contributed.
Same pay, two paths
$6,000 of pay goes into a traditional account as $6,000, or into a Roth as $4,560 after 24% tax. If both grow 10 times, the traditional account reaches $60,000 and leaves $45,600 after 24% tax; the Roth reaches $45,600 tax-free. Equal. At a 12% rate in retirement, traditional leaves $52,800 and wins.
Why is this the archetypal CPA-and-adviser question?
It needs both skills: a view of today's tax position, which the CPA has, and a view of retirement income and tax rates, which the planner builds. Firms that answer it well tend to keep the client for both services.
The calculator frames the decision correctly, around rates, and the request arrives with the client's own assumptions, which you can then test.
Follow-ups this request opens
- Estimate the client's likely retirement tax bracket
- Split contributions between Roth and pre-tax for diversification
- Plan Roth conversions in low-income years
- Review state tax now versus in a retirement state
What this calculator leaves out
- Assumes the client invests the same pre-tax pay either way.
- Contribution and income limits are not enforced.
- RMDs, Social Security taxation and IRMAA are not modeled.
- Constant rates and return.
Platform disclaimer shown under the calculator: Estimates only. Compares equal pre-tax contribution power: Traditional is taxed at withdrawal, Roth is taxed now and grows tax-free. Real results depend on tax law, income and contribution limits. Consult a tax professional.
Compliance note for firms
The choice depends on assumptions about future tax law and income; advice on it is written tax advice under Circular 230 §10.37 and should state the assumptions used. Advisers should present projections as hypothetical, with client-chosen inputs.
Not legal advice. See our disclaimer and the guide to compliance for client calculators.
2026 figures this page relies on
| Figure | Value | Tax year | Source |
|---|---|---|---|
| 401(k)/403(b)/457(b) employee deferral limit | $24,500 | 2026 | IRS |
| IRA contribution limit (all IRAs combined) | $7,500 | 2026 | IRS |
The same values drive the calculator. Full list on the 2026 figures page.
Terms your client sees in the calculator
These definitions appear in the calculator's collapsible Definitions block, so clients don't have to call to ask what a label means.
- Roth account
- A retirement account funded with after-tax dollars. You pay tax on the contribution now, and qualified withdrawals, including all growth, are tax-free. In this comparison, the pre-tax contribution power is first reduced by today’s tax rate, and what remains grows tax-free until withdrawal.
- Traditional account
- A retirement account funded with pre-tax dollars. The contribution lowers taxable income today, the full amount grows tax-deferred, and withdrawals are taxed as ordinary income. Here the ending balance is reduced by your expected retirement tax rate to give its after-tax value, which is compared with the Roth.
- Pre-tax contribution power
- The amount of income you devote to saving before tax, applied equally to both options so the comparison is fair. $6,000 of pre-tax income becomes a $6,000 Traditional contribution, or a $4,560 Roth contribution after a 24% tax. The Roth must make up that smaller start by being tax-free later.
- Tax rate now
- Your marginal tax rate today, which applies to the contribution if you choose Roth. The higher it is compared with your expected rate in retirement, the more the Traditional option tends to win, because you avoid tax at a high rate now and pay it later at a lower one.
- Tax rate in retirement
- Your expected marginal rate when you withdraw from the Traditional account. It is uncertain, depending on future income, tax law and where you live. If it equals today’s rate, both options end with the same after-tax value in this model; the difference result shows how far your inputs sit from that break-even.
- Difference (Roth − Traditional)
- The Roth after-tax value minus the Traditional after-tax value. A positive number favors Roth under your assumptions; a negative one favors Traditional. Because it depends mostly on the two tax rates, testing several retirement rates shows how sensitive the choice is, and some savers split contributions between both types.
In our glossary: Marginal tax rate · Roth conversion · Tax-deferred
Roth vs. Traditional calculator: questions from firms and clients
Does Roth always win for young people?
Often, because their rate is low now, but not always. The calculator lets them test their own rates.
What if I don't know my future tax rate?
Test a few. Splitting contributions between Roth and traditional is a reasonable hedge, and a firm can estimate a likely range.
Are limits the same for Roth and traditional?
Yes, they share the $24,5002026 · IRS 401(k) limit and the $7,5002026 · IRS IRA limit.
Does it include employer match?
No. Employer contributions are often pre-tax regardless.
What about state tax?
Include state tax in both rates if the client may move states in retirement.
Does it consider RMDs?
No. Traditional accounts have RMDs; Roth IRAs don't for the owner, which favors Roth for some.
Is a Roth conversion the same decision?
Similar logic, but you pay tax on money already saved. See the Roth conversion calculator.
Which plan includes it?
Network. See pricing.
No question matches that filter. Clear it to see them all, search the whole site, or ask us directly; we reply within one business day.
Clients who ask this usually ask next
Roth Conversion
should I do a roth conversion this year
401(k) / 403(b) / 457
how much should I contribute to my 401k to get the full match
Marginal Tax Rate
what tax bracket am I in and what happens if I earn more
All “401(k), IRA & Roth” calculators · Everything in Retirement
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