Roth vs. Traditional Calculator
Pre-tax or after-tax — which leaves you more money to actually spend in retirement? Compare a Roth and a Traditional contribution on an honest, after-tax basis, and see the one number that decides it: the break-even retirement tax rate.
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Roth vs. Traditional, decided by one number
Both accounts get the same tax break — just at different times. A Traditional contribution is deducted from your income today and grows tax-deferred; you pay income tax on every dollar you withdraw in retirement. A Roth contribution is made with money you've already paid tax on, and then grows and comes out completely tax-free.
Because of that symmetry, the entire decision collapses to a single comparison: your marginal tax rate now versus in retirement. Pay the tax when your rate is lowest. If you expect to be in a higher bracket later, Roth's pay-now deal wins; if you expect a lower bracket, Traditional's defer-now deal wins.
This calculator makes the comparison fair. Putting $7,000 into a Roth costs more out of pocket than $7,000 into a Traditional account, because the Roth dollars are already taxed. So it can invest Traditional's up-front tax savings in a taxable side account — capital-gains drag and all — so both paths use the same budget. Then it solves for the break-even retirement tax rate: the rate at which the two paths leave you with exactly the same after-tax money.
- Above the break-even rate: Roth comes out ahead — paying tax now, while it's cheap, locks in tax-free growth.
- Below it: Traditional wins — deferring tax at a high rate and paying it later at a lower one keeps more.
Two things the dollar math doesn't price, both pointing toward Roth: a Roth IRA has no required minimum distributions in your lifetime, so it can keep compounding untouched — and Roth is a hedge against future tax-rate increases, since you've already settled the bill at today's known rate.
Common questions
- Is a Roth or a Traditional account better for me?
- It hinges on your marginal tax rate now versus in retirement. Enter both rates (or estimate them from your income), and the calculator tells you which path leaves more after-tax money — and the exact break-even retirement tax rate where they tie. If you expect a higher bracket later, Roth tends to win; lower, Traditional.
- What about contribution limits?
- Limits are shown for reference but don't cap the math — so you can compare any contribution amount apples-to-apples. For 2025, that's $7,000 into an IRA and $23,500 of 401(k) elective deferral, plus catch-up contributions if you're 50 or older. Check the current year's limits before you contribute.
- Is anything saved or sent anywhere?
- No. Every number runs in your browser. Nothing you type is uploaded, stored, or shared — and you can export the full year-by-year table to CSV with one click.
Finding the money to contribute is the hard part
Taly auto-splits every paycheck across your budget — so the room to fund a Roth or Traditional account shows up on its own, instead of you hunting for it. Your paycheck does the math.