IRA Calculator
Compare traditional and Roth IRAs on an after-tax basis.
Inputs
2024 limit: $7,000 ($8,000 if 50+). Enter the amount you plan to contribute.
Your marginal federal + state rate today. Applies to traditional contributions (deduction) and Roth contributions (already paid).
Traditional withdrawals will be taxed at this rate. Roth withdrawals are tax-free.
Traditional IRA gives an upfront tax deduction. Turning this on invests that savings in a taxable account to make the comparison fair.
Rate applied annually to the taxable account holding the reinvested tax savings.
Roth IRA Value
$609,985
Traditional IRA (After-Tax, incl. reinvested savings)
$566,935
Roth Advantage (Deficit)
$43,051
Positive = Roth wins; negative = Traditional wins.
Traditional After-Tax (Before Reinvested Savings)
$457,489
Reinvested Traditional Tax Deduction Value
$109,446
Total Contributions
$180,000
Step by step
Both accounts grow to the same pre-tax value
FV($6,000/yr, 7%, 30 yrs)
= $609,985
Traditional: tax due at withdrawal
$609,985 × 25%
= $152,496
Traditional after-tax value (before tax savings)
= $457,489
Add: invested traditional tax deduction savings
= $109,446
Annual tax saving of $1,320 invested in a taxable account.
Traditional total after-tax (incl. reinvested savings)
= $566,935
Roth final after-tax value
= $609,985
Roth withdrawals are entirely tax-free — no deduction at this step.
Roth advantage
$609,985 − $566,935
= $43,051
Roth wins because your expected future rate exceeds your current rate.
How it works
The IRA comparison is nuanced because Roth and Traditional IRAs represent different after-tax wealth. A $6,000 Roth contribution costs you $6,000 of after-tax money; a $6,000 traditional contribution effectively costs less because of the upfront deduction. To make a fair comparison, this calculator optionally invests the traditional deduction savings in a taxable account. When tax rates don't change, the two strategies produce identical results — the divergence comes entirely from rate differences between now and retirement.
Formula
Traditional IRA after-tax value
Traditional after-tax = Pre-tax FV × (1 − retirement rate) + Reinvested savings value
- FV_Trad
- Traditional IRA future value (pre-tax)
- t_ret
- Marginal tax rate in retirement
- V_savings
- Future value of reinvested annual tax deductions
Uses 2024 contribution limits and illustrative tax rates. State taxes are not included. Consult a tax advisor before making IRA contribution decisions.
Frequently Asked Questions
If tax rates don't change, which IRA is better?
Neither — they're mathematically equivalent when tax rates are the same today and in retirement. The calculator will show zero advantage either way. The choice matters only when rates differ.
What is the 'invest traditional tax savings' toggle?
A traditional IRA contribution saves you taxes today via the deduction. To make the comparison fair, you should invest those savings — otherwise you're comparing a Roth account to a traditional account plus cash sitting idle. When toggled on, the tax savings are invested in a taxable account and added to the traditional IRA's total after-tax wealth.
Does a Roth IRA have required minimum distributions?
No. Roth IRAs are exempt from RMDs during the owner's lifetime. Traditional IRAs must take required minimum distributions starting at age 73. This is another advantage of the Roth for estate planning and tax flexibility in retirement.
Can I have both a Roth and Traditional IRA?
Yes. You can contribute to both in the same year as long as your total contributions don't exceed the annual limit ($7,000 in 2024). Many savers split contributions to hedge against future tax rate uncertainty.