Roth vs Traditional Comparison Calculator

Work out roth vs traditional comparison instantly with clear inputs, formula shown and shareable results.

About Roth vs Traditional Comparison Calculator

Traditional contributions are deducted now and taxed on withdrawal; Roth contributions are taxed now and withdrawn free. With identical tax rates the two are mathematically equal, so the decision turns entirely on whether your rate will be higher now or later. An 8% annual return is assumed throughout.

Formula

After-tax comparison

Traditional = FV(C) × (1 - t_later); Roth = FV(C × (1 - t_now))

Worked example

With the default values below, Roth vs Traditional Comparison Calculator returns Advantage Of The Better Option of $3,947,720.76. Change any input above and every figure here is recalculated in your browser.

Inputs used

Annual Pre-Tax Contributionminimum 0: 500,000
Years Until Withdrawalaccepts 1–45: 25
Tax Rate Todayaccepts 0–60 %: 30 %
Tax Rate In Retirementaccepts 0–60 %: 20 %

Results

Advantage Of The Better Option: $3,947,720.76
Roth Value After Tax: $27,634,045.30
Traditional Value After Tax: $31,581,766.06
Which Wins: Traditional wins — the upfront deduction is worth more

Step by step

1Values used
2After-tax comparison
3Advantage Of The Better Option= 3,947,720.76
4Roth Value After Tax= 27,634,045.30
5Traditional Value After Tax= 31,581,766.06
6Which Wins= Traditional wins — the upfront deduction is worth more

Assumptions and limits

The result is derived only from the 4 inputs listed above. Anything not among them is not part of the calculation.
In particular, this calculator does not take inflation or fees or charges into account.
Figures are rounded for display to 2 decimal places, so totals built from several rounded parts can differ slightly from the unrounded arithmetic.
Figures are estimates for planning only. Market returns are not guaranteed, and rates, limits and tax rules change. This is not financial or tax advice — speak to a qualified adviser before acting.
This is an estimate for general information and not professional financial, tax or legal advice. See the full disclaimer for the limits that apply to this kind of calculator.

How these calculators are built and tested is described on the Methodology page. If a figure looks wrong, please report it.

Figures are estimates for planning only. Market returns are not guaranteed, and rates, limits and tax rules change. This is not financial or tax advice — speak to a qualified adviser before acting.

Frequently Asked Questions

Why are they equal at equal tax rates?

Because multiplication is commutative — taxing before or after growth gives the same result when the rate does not change.

What else tips the balance?

Roth accounts avoid required withdrawals in many regimes and give tax diversification, which has value beyond the arithmetic.