Roth vs Traditional 401(k) Calculator
Should you pay taxes now (Roth) or later (Traditional)? Enter your salary and expected retirement tax bracket to see which 401(k) type builds more after-tax wealth.
A Traditional 401(k) is funded with pre-tax dollars, reducing your current taxable income, with withdrawals taxed as ordinary income in retirement. A Roth 401(k) is funded with after-tax dollars (no current tax break) but all withdrawals in retirement — including decades of growth — are completely tax-free.
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Traditional 401(k)
Roth 401(k)
Verdict
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The Simple Rule
Whether you are looking for a roth vs traditional 401 estimator, calculate roth vs traditional 401, how to calculate roth vs traditional 401, roth vs traditional 401 formula, free roth vs traditional 401 calculator, or roth vs traditional 401 returns — this free roth vs traditional 401 calculator provides accurate estimates to help you plan and make informed financial decisions.
If you expect to be in a higher tax bracket in retirement (income rises, tax rates increase, Roth conversions), choose Roth — pay taxes at today's lower rate. If you expect a lower bracket in retirement, choose Traditional — defer taxes to when the rate is lower. When in doubt, split contributions between both.
What Most People Miss
A Traditional 401(k) balance looks bigger, but it's not all yours — the IRS owns a portion equal to your future tax rate. A $1M Traditional balance at a 22% retirement rate is really $780K. A $1M Roth balance is the full $1M. Also, Roth 401(k) withdrawals don't count toward the income threshold that makes Social Security taxable.
People Also Ask
Can I contribute to both Roth and Traditional 401(k)?
Which is better if tax rates go up in the future?
Does my employer match go into Roth or Traditional?
How to Use This Calculator
Enter your current annual salary, the percentage you contribute to your 401(k), your current federal tax bracket, and your expected tax bracket in retirement. The calculator projects both account values over time, accounting for pre-tax contributions (Traditional) vs post-tax contributions (Roth) and their respective tax treatments at withdrawal.
Example: A 30-year-old earning $90,000, contributing 10% ($9,000/year), in the 22% bracket now and expecting to be in the 12% bracket in retirement: the Traditional 401(k) wins by approximately $62,000 at age 65 because the tax deferral compounds more efficiently when your current bracket is higher than your future bracket.
Roth 401(k) vs Traditional 401(k): Complete 2026 Comparison
| Feature | Traditional 401(k) | Roth 401(k) |
|---|---|---|
| 2026 contribution limit | $23,500 ($31,000 if age 50+, $34,750 if age 60-63) | |
| Tax on contributions | Pre-tax (reduces taxable income now) | After-tax (no tax break now) |
| Tax on withdrawals | Taxed as ordinary income | Tax-free (contributions + growth) |
| Required Minimum Distributions (RMDs) | Required starting at age 73 | No RMDs (after SECURE 2.0) |
| Employer match | Always goes to Traditional (pre-tax) side, regardless of your election | |
| Income limits | None — available at any income level (unlike Roth IRA) | |
| Best for | Higher bracket now than expected in retirement | Lower bracket now, expect higher later, or want tax diversification |
The Tax Bracket Decision Framework
The Roth vs Traditional question boils down to one thing: will your tax rate be higher or lower in retirement? If higher later, pay taxes now (Roth). If lower later, defer taxes (Traditional). Here's how to think through it:
| Current bracket | Expected retirement bracket | Better choice | Why |
|---|---|---|---|
| 10-12% | 12% or higher | Roth | Low tax cost now, likely same or higher bracket later |
| 22% | 12% | Traditional | Save 10% on every dollar contributed |
| 22% | 22% | Either / Split | Same bracket = same outcome; split for tax diversification |
| 24-32% | 12-22% | Traditional | Significant bracket drop = large tax deferral benefit |
| 35-37% | 22-24% | Traditional | High earners almost always benefit from deferral |
The wild card: Future tax rates are unknowable. If Congress raises tax rates (which many economists expect given the national debt), Roth contributions made today at 22% could be worth far more than Traditional contributions that will be taxed at 25-30% in retirement. This uncertainty is the strongest argument for contributing to both — tax diversification hedges against an unpredictable future.
The Employer Match Rule
Regardless of whether you elect Roth or Traditional for your own contributions, your employer's matching contributions always go into the Traditional (pre-tax) side. This means even a 100% Roth employee will have some Traditional 401(k) balance. The match itself grows tax-deferred and is taxed as income when withdrawn. This is important for retirement income planning — you'll have both taxable and tax-free buckets regardless of your election.
The Split Strategy: Why Many Advisors Recommend Both
Rather than going all-in on one type, many financial planners recommend splitting contributions. A common approach: contribute enough Traditional to lower your taxable income into a lower bracket, then put the rest into Roth. This gives you tax-free withdrawals (Roth) for discretionary spending in retirement and taxable withdrawals (Traditional) for base living expenses — with the flexibility to choose which bucket to pull from each year based on your actual tax situation.