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Traditional vs. Roth IRA Calculator

Evaluate whether a Traditional IRA (tax-deferred), Roth IRA (tax-free growth), or regular taxable savings maximizes your after-tax retirement nest egg.

Tax Arbitrage Decision Model

IRA Strategy Parameters

Compare future wealth accumulation across Traditional, Roth, and taxable investment accounts.

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🏆 Optimal Strategy: Traditional IRA At Retirement Age
Traditional IRA After-Tax Net Wealth
$906,392

Traditional IRA yields +$106,634 more after-tax spending wealth than Roth IRA. Both IRA accounts outperform regular taxable savings by over +$236,324.

Trad. After-Tax
$906,392
Roth IRA Net
$799,758
Taxable Net
$563,434

Account Comparison Summary

Category Traditional Roth IRA Taxable
Balance at Age 65 (Pre-Tax) $1,066,343 $799,758 $563,434
Balance at Age 65 (After-Tax) $906,392 $799,758 $563,434

After-Tax Wealth Growth Trajectory

Net spending wealth at each age milestone

Trad. After-Tax Roth IRA Taxable
$0 $299,109 $598,219 $906,392 Age 31 Age 42 Age 53 Age 65

Yearly Accumulation Comparison Schedule

Year-by-year accumulation comparison schedule.

Age Year Trad. Gross Trad. Net Roth IRA Taxable
31 1 $39,300 $33,405 $29,475 $29,138
32 2 $49,158 $41,784 $36,869 $36,074
33 3 $59,607 $50,666 $44,706 $43,322
34 4 $70,684 $60,081 $53,013 $50,896
35 5 $82,425 $70,061 $61,819 $58,812
36 6 $94,870 $80,640 $71,153 $67,083
37 7 $108,063 $91,853 $81,047 $75,727
38 8 $122,046 $103,739 $91,535 $84,760
39 9 $136,869 $116,339 $102,652 $94,199
40 10 $152,581 $129,694 $114,436 $104,063
41 11 $169,236 $143,851 $126,927 $114,371
42 12 $186,890 $158,857 $140,168 $125,143
43 13 $205,604 $174,763 $154,203 $136,399
44 14 $225,440 $191,624 $169,080 $148,162
45 15 $246,467 $209,497 $184,850 $160,454
46 16 $268,755 $228,441 $201,566 $173,300
47 17 $292,380 $248,523 $219,285 $186,723
48 18 $317,423 $269,809 $238,067 $200,751
49 19 $343,968 $292,373 $257,976 $215,409
50 20 $372,106 $316,290 $279,079 $230,728
51 21 $401,932 $341,643 $301,449 $246,736
52 22 $433,548 $368,516 $325,161 $263,464
53 23 $467,061 $397,002 $350,296 $280,945
54 24 $502,585 $427,197 $376,939 $299,212
55 25 $540,240 $459,204 $405,180 $318,302
56 26 $580,154 $493,131 $435,116 $338,250
57 27 $622,464 $529,094 $466,848 $359,096
58 28 $667,311 $567,215 $500,484 $380,881
59 29 $714,850 $607,623 $536,138 $403,645
60 30 $765,241 $650,455 $573,931 $427,434
61 31 $818,656 $695,857 $613,992 $452,294
62 32 $875,275 $743,984 $656,456 $478,272
63 33 $935,291 $794,998 $701,469 $505,419
64 34 $998,909 $849,073 $749,182 $533,788
65 35 $1,066,343 $906,392 $799,758 $563,434

Choosing Between Traditional and Roth IRAs

Individual Retirement Accounts (IRAs) are personal investment vehicles offering major tax incentives to help workers accumulate wealth for retirement. The two primary categories differ primarily in when you pay taxes:

  • Traditional IRA: Contributions are generally deductible in the year they are made, reducing current taxable income. Growth compounds tax-deferred, and distributions in retirement are taxed as ordinary income.
  • Roth IRA: Contributions are made with after-tax earnings (no upfront deduction). All qualified distributions in retirement (including earnings) are 100% tax-free.

Traditional IRA

Optimal when your current marginal tax bracket is significantly higher than your projected tax bracket in retirement.

Roth IRA

Optimal when your tax bracket today is low, or if you expect tax rates to increase in the future. Features no lifetime RMDs.

Taxable Brokerage

Provides unrestricted liquidity at any age without early withdrawal penalties, but suffers from annual dividend and capital gains taxes.

Frequently Asked Questions (FAQ)

Can I contribute to both a 401(k) and an IRA?

Yes. You can contribute to both an employer 401(k) and your own personal IRA in the same tax year. However, if you or your spouse are covered by a workplace retirement plan, your ability to deduct Traditional IRA contributions phases out at higher income levels.

What is a SEP IRA or SIMPLE IRA?

Simplified Employee Pension (SEP) and Savings Incentive Match Plan for Employees (SIMPLE) IRAs are specialized tax-deferred accounts designed for small business owners and self-employed freelancers with much higher contribution limits than standard individual IRAs.

Understanding your calculation

Method, example and limitations

How the calculation works

An IRA comparison projects contributions and growth while applying the selected assumptions about contribution deductions and withdrawal taxes.

Example to check

An illustrative 1,000 fully deductible contribution at a hypothetical 20% marginal rate reduces modeled current tax by 200; actual deductibility must be checked separately.

Before using the result

Income, workplace-plan coverage, contribution limits and distribution rules affect treatment. Future tax rates, returns and fees are uncertain.

Calculation methodology · Report a result that needs review