Skip to main content
/
rothiraretirementtax-planninginvestingRoth conversionbreak-even
//// Financial · Retirement

Roth vs Traditional IRA

Pay taxes now or later? Enter your current and expected retirement tax brackets — see after-tax balances, the break-even retirement rate, and a year-by-year growth schedule. Built for freelancers who control their income timing.

Where this fits

📈 Investing & WealthRetirement Plan

This tool lives inside Retirement Plan and is most useful for people making this kind of decision.

401(k) Limit 2024$23,000
Roth IRA Limit$7,000
S&P 500 Avg Return~10%/yr

Your IRA Profile

Current marginal tax rateYour rate today — this is what Roth costs
Expected retirement tax rateLower if income drops; higher if SS + RMDs push you up

Roth wins by $145K

Equal rates produce mathematically identical after-tax outcomes. Roth has a practical edge: no Required Minimum Distributions, tax-free inheritance for heirs, and no income tax on future growth. Default to Roth when rates are uncertain.

Roth at Retirement
$661K
$0 tax at withdrawal
Roth Net Value
$661K
Keep every dollar
Traditional at Retirement
$661K
$145K tax owed
Traditional Net Value
$516K
After 22.0% retirement tax

Head-to-Head Comparison

Roth IRA
Contribution / yr$7,000
Balance at retirement$661K
Tax at withdrawal$0
Net after-tax$661K
Traditional IRA
Contribution / yr$7,000
Balance at retirement$661K
Tax at withdrawal (22.0%)−$145K
Net after-tax$516K

Break-even retirement tax rate

At this rate, both accounts produce identical after-tax wealth

0.0%

Balance Over Time

AgeRothTraditionalTrad (after-tax)
35$0$0$0
40$43K$43K$34K
45$103K$103K$81K
50$188K$188K$147K
55$307K$307K$240K
60$474K$474K$370K
65$708K$708K$552K
1

Annual contribution (capped at IRS limit)

min(annualContribution, limit)

min($7,000, $7,000)

= $7,000

2024 limit: $7,000 (catch-up available at 50)

2

Roth: future value at retirement

FV(pmt, r, n) + FV(currentBalance, r, n)

$7,000/yr × 30 yrs @ 7.0%

= $661K

Tax-free at withdrawal — $0 owed.

IRS Publication 590-A

3

Traditional: future value at retirement

FV(pmt, r, n) + FV(currentBalance, r, n)

$7,000/yr × 30 yrs @ 7.0%

= $661K

4

Traditional: tax owed at withdrawal

tradTotal × retirementTaxRate

$661K × 22.0%

= $145K

All withdrawals taxed as ordinary income.

5

Traditional: net after-tax value

tradTotal × (1 − retirementTaxRate)

$661K × (1 − 22.0%)

= $516K

6

Break-even retirement tax rate

(1 − rothTotal / tradTotal) × 100

(1 − $661K / $661K) × 100

= 0.0%

The retirement tax rate at which both accounts produce identical after-tax wealth.

Key insight

With the same nominal contribution amount, Roth wins when your retirement tax rate is higher than today's rate, Traditional wins when lower. When rates are equal, the after-tax outcome is identical — but Roth has practical advantages: no RMDs, tax-free inheritance, and no income tax risk on future growth.

Use this result in →

Retirement Readiness →Financial Snapshot →HSA Optimizer →

#ShowYourWork

You might also need

Retirement Savings Calculator

Find out if you're on track to retire comfortably. See your projected balance, inflation-adjusted income, and exactly how much more to save each month to close any gap.

Try it

401(k) Contribution Optimizer

Find the optimal 401(k) contribution to maximize your employer match, minimize taxes, and hit your retirement goal. Shows the real cost of under-contributing — before and after employer match.

Try it

Tax Bracket Visualizer 2024

Visual, educational tool showing exactly how 2024 federal tax brackets work. Stacked bar chart for each bracket, effective vs marginal rate, pre-tax deductions, and the bracket bump myth — busted with the math shown.

Try it

💰More Financial tools

Savings Rate Calculator→Financial Snapshot→Retirement Readiness Score→HSA Contribution Optimizer→All Financial tools