After-tax retirement value: Roth (post-tax in, tax-free out) vs Traditional (pre-tax in, taxed out).
2025 IRA contribution limit is $7,000 (under 50) / $8,000 (50+). Income limits apply for both Roth contributions and Traditional deductibility — this calculator assumes you're eligible. Math: Traditional grows the full pre-tax contribution and taxes the withdrawal at your retirement rate; Roth invests only the post-tax amount but the withdrawal is tax-free. When the two brackets are equal, the strategies are mathematically identical (assuming the Traditional tax savings are also invested).
The choice between a Roth and a Traditional IRA is one of the most consequential decisions a US saver makes, and most articles get it backwards. The popular framing is "Roth is better because withdrawals are tax-free" or, in the opposite camp, "Traditional is better because the deduction is real money today." Both slogans miss the actual mechanics. Under a flat assumed return and a single contribution, the math reduces to a clean inequality between two tax rates: your current marginal rate (the rate that would apply to the deduction you'd take with a Traditional contribution) and your expected retirement marginal rate (the rate that will apply when you withdraw from the Traditional account decades from now). When those two rates are equal, the two accounts produce exactly the same after-tax dollars at retirement, provided you also invest the Traditional tax savings in a side account. Roth wins when retirement rates rise; Traditional wins when retirement rates fall. This calculator runs the comparison at any combination of contribution, brackets, return, horizon, and side-account assumption so you can see the actual gap rather than guess it.
Let C be your annual contribution, r the expected real return, n the years to retirement, t_now your current marginal tax rate, and t_ret your expected retirement marginal rate. Define F = (1 + r)^n as the future-value factor. Then:
Traditional, no side account:
C × F × (1 − t_ret)— the full pre-tax dollar grows fornyears, then the entire withdrawal is taxed. Roth:C × (1 − t_now) × F— only the post-tax dollars enter the account, but the withdrawal is untaxed.
Factor out C × F and the comparison collapses to (1 − t_now) versus (1 − t_ret), i.e. t_ret versus t_now. If t_now == t_ret, the two are identical. No exceptions, no edge cases — that is the breakeven, and it is the single most useful insight in retirement-account planning.
The "fair comparison" panel adds a third term. Without a side account, Traditional appears to give you a free C × t_now of deduction-value at the moment of contribution; in reality that money is yours to invest in a taxable brokerage. If you do, it grows at the same r for n years and is finally taxed at the long-term capital-gains rate t_cg. The side account's after-tax balance is C × t_now + (C × t_now × (F − 1)) × (1 − t_cg). Adding it to the Traditional after-tax balance restores the strict equivalence at t_now == t_ret and is the cleaner mental model.
Enter your annual contribution (the 2025 IRA limit is $7,000 under 50, $8,000 at 50+; this calculator does not enforce that floor so you can also model 401(k)-style scenarios). Set your current marginal rate — for most US filers the 12 %, 22 %, 24 %, 32 %, 35 % or 37 % federal brackets, plus your state rate if applicable. Set your expected retirement marginal rate; this is the most uncertain input and worth running at three different assumptions. Set the expected return (7 % real is a common long-horizon assumption for a US-equity-tilted portfolio), the years to retirement, and decide whether to include the side-account model. Read the winner KPI, the after-tax retirement balances, and the gap. The chart stacks principal versus growth so you can see how much of each balance is your contributions versus tax-deferred or tax-free compounding.
A 35-year-old contributes $7,000 to either a Roth or a Traditional IRA at a current 28 % marginal rate, expects a 24 % retirement rate, a 7 % real return, and 30 years to retirement. The future-value factor F is 1.07^30 ≈ 7.612. Traditional grows $7,000 × 7.612 = $53,287, taxed at 24 % leaves $40,498. Roth invests $7,000 × 0.72 = $5,040 post-tax, which grows to $5,040 × 7.612 = $38,366 and is withdrawn tax-free. Traditional wins by $2,132 — a 5 % advantage that compounds across thirty years of contributions. Now flip the brackets: 12 % current, 24 % retirement (a young saver early in their career). Traditional yields $53,287 × 0.76 = $40,498. Roth invests $7,000 × 0.88 = $6,160 post-tax → $46,894 tax-free. Roth wins by $6,396 — and the bracket asymmetry, not the account itself, is doing the work.
Seven traps deserve attention. First, direct Roth contributions phase out at modified AGI thresholds (in 2025 around $150–165k single, $236–246k joint); above the cap, the backdoor Roth — contribute non-deductible to a Traditional, then convert — is the standard workaround, but it is messy if you have any pre-tax IRA balance because of the pro-rata rule. Second, Traditional IRA deductibility itself phases out when you (or your spouse) are covered by a workplace plan; you can still contribute, but the deduction may be partial or zero, which changes the math. Third, RMDs — required minimum distributions — apply to Traditional IRAs starting at age 73 (rising to 75 in 2033) but never to Roth IRAs during the original owner's life; this is a meaningful Roth advantage for high-balance retirees who do not need the income. Fourth, the 5-year rule on conversions: each Roth conversion has its own 5-year clock before the converted principal can be withdrawn penalty-free under age 59½. Fifth, the ordering rules on early Roth withdrawals (contributions first, conversions next in FIFO order, earnings last) matter only before 59½ and disappear after. Sixth, future tax-rate uncertainty is the deepest unknown — federal brackets in 1980 went up to 70 %, dropped to 28 % by 1988, drifted back to 39.6 %, then 37 %, and the post-2025 sunset of TCJA is scheduled but not yet certain. Seventh, the calculator assumes a single contribution; over an entire career, you typically straddle brackets and benefit from a both-buckets strategy — some Roth, some Traditional — so retirement income can be sourced from whichever account is most tax-efficient that year.
The Roth vs Traditional question has analogues in every developed retirement system. In the United Kingdom, an ISA is the post-tax bucket (contributions from already-taxed income, all withdrawals tax-free) and a SIPP (or workplace pension) is the pre-tax bucket (contributions tax-deductible, withdrawals taxed at marginal rate above the 25 % tax-free lump sum). The same t_now vs t_ret inequality drives the choice, with the wrinkle that the SIPP's 25 % tax-free lump sum gives it a structural advantage equivalent to roughly a 5–10 percentage-point bracket cut at withdrawal. In France, the PER (Plan d'Épargne Retraite) explicitly offers two compartments: the déductible compartment behaves like a Traditional IRA (deducted at contribution, taxed at withdrawal), while the non-déductible compartment behaves like a Roth (no deduction, capital tax only on the gains, not the principal). The choice depends on the contributor's TMI (taux marginal d'imposition) today versus expected at retraite. In Canada, the TFSA (Tax-Free Savings Account) is the Roth analogue and the RRSP (Registered Retirement Savings Plan) is the Traditional analogue, with TFSA having a smaller annual limit but full liquidity and no withdrawal taxation. Across all four systems, the universal rule holds: when current and expected retirement brackets are equal, the two account types are mathematically identical; the entire game is about predicting which bracket will be higher when the cash flows out, and weighting the odds with the certainty premium that tax-free compounding inside a Roth-style bucket provides.