Roth 401(k) vs Traditional 401(k) Calculator

What This Calculator Does

Your employer's 401(k) plan offers both a Traditional and a Roth option. Which one leaves you with more money in retirement? The answer depends on one variable above all others: whether your tax rate in retirement will be higher or lower than your tax rate today. This calculator runs both scenarios side by side and shows the after-tax value of each, so you can see the difference in dollars rather than guess.

Enter your annual contribution, your current marginal tax rate, your expected retirement tax rate, your assumed investment return, and years to retirement. The tool projects both balances, applies the retirement tax rate to the Traditional balance, and compares the after-tax values. It uses the 2026 elective deferral limit of $24,500, with the age 50 catch-up of $8,000 and the super catch-up of $11,250 for ages 60 through 63.

According to the IRS page on designated Roth accounts, Roth 401(k) contributions are made with after-tax dollars, grow tax-free, and qualified withdrawals in retirement are tax-free. Traditional 401(k) contributions are pre-tax, growth is tax-deferred, and withdrawals are taxed as ordinary income. Both share the same $24,500 elective deferral limit for 2026.

Inputs Required

• Annual Contribution (pre-tax): What you plan to defer each year, capped at the 2026 limit
• Current Marginal Tax Rate: Your tax bracket while making contributions
• Expected Retirement Tax Rate: Your estimated tax bracket when you withdraw
• Expected Annual Return: Your assumed investment growth rate
• Years to Retirement: Your accumulation window
• Current Balance: What you have saved so far

Outputs Provided

• Traditional 401(k) Balance: Pre-tax balance at retirement
• Traditional After-Tax Value: Balance minus retirement tax
• Roth 401(k) Balance: After-tax balance at retirement
• Roth After-Tax Value: The full balance, since withdrawals are tax-free
• Winner and Difference: Which option wins and by how much

How the Calculation Works

The core comparison is simple in principle. A Traditional contribution goes in pre-tax and grows tax-deferred, but is taxed at withdrawal. A Roth contribution goes in after-tax and grows tax-free, with no tax at withdrawal. The question is whether paying tax now or later leaves more money in your pocket.

If your current and retirement tax rates are equal, the two options produce the same after-tax result. The math works out because the tax is multiplicative: taxing the contribution now versus taxing the withdrawal later gives the same number when the rate is identical. Roth wins when your retirement rate is higher than your current rate. Traditional wins when your retirement rate is lower, which is the common case for retirees with lower income than their working years.

The calculator compares equal pre-tax contributions. A $10,000 pre-tax contribution to a Traditional 401(k) costs you $7,600 out of pocket at a 24% rate. The same $10,000 to a Roth 401(k) costs you $10,000 out of pocket, because you pay the tax upfront. To make a fair comparison, the calculator reduces the Roth contribution by the current tax rate, so both scenarios have the same out-of-pocket cost.

How to Use the Calculator

1. Enter your planned annual contribution. The 2026 limit is $24,500, or $32,500 with the age 50 catch-up.
2. Enter your current marginal tax rate. Find it with our Tax Bracket Calculator.
3. Estimate your retirement tax rate. If you expect a smaller income in retirement, this is likely lower than today. If you expect a large pension or high required withdrawals, it could be higher.
4. Set an expected annual return. A diversified portfolio historically returns 6% to 8%.
5. Enter your years to retirement and current balance.
6. Read the winner and the dollar difference. The chart shows both balances growing over time.

Example Calculations

Example 1: A Young High Earner

Alex is 32, earns $180,000, and is in the 32% bracket. He expects to drop to the 22% bracket in retirement because he plans to live on less. He contributes $15,000 per year for 30 years at a 7% return. The Traditional 401(k) grows to about $1.52 million, and after 22% tax, he keeps $1.18 million. The Roth 401(k), with after-tax contributions of $10,200 per year, grows to about $1.03 million, all tax-free. Traditional wins by about $150,000 because his retirement rate is lower than his current rate.

Example 2: A Mid-Career Worker Expecting a Pension

Maria is 45, earns $95,000, and is in the 22% bracket. She will receive a $60,000 pension in retirement that, combined with Social Security and required minimum distributions, may push her back into the 24% bracket. She contributes $12,000 per year for 20 years at 7%. The Traditional balance grows to about $590,000, and after 24% tax, she keeps $448,000. The Roth balance grows to about $491,000, all tax-free. Roth wins by about $43,000 because her retirement rate is higher than her current rate.

Real World Scenarios

Tax Diversification in Retirement

A couple retires with $500,000 in a Traditional 401(k) and $300,000 in a Roth 401(k). Each year they withdraw from the Traditional up to the top of the 12% bracket, then pull the rest from the Roth to stay out of the 22% bracket. This tax diversification lets them control their taxable income year by year, which also affects Medicare premiums and Social Security taxation. Splitting contributions during the working years gives them this flexibility. The calculator shows the standalone outcome, but the real value of having both is optionality.

The Early Career Case for Roth

A 25-year-old earning $55,000 is in the 22% bracket but expects to earn much more over her career, eventually landing in the 32% or 35% bracket. Her retirement tax rate could be higher than 22% if she saves aggressively and has large required withdrawals. Roth 401(k) contributions now lock in the 22% rate, and decades of tax-free growth follow. Even if her retirement rate ends up at 24%, the Roth wins. The calculator confirms this when you set the current rate below the retirement rate.

The Pre-Retirement Case for Traditional

A 58-year-old in the 32% bracket plans to retire at 65 and live on about $80,000 per year, putting him in the 22% bracket in retirement. He should favor Traditional contributions for his final seven years, because the tax deduction at 32% is worth more than the future tax savings at 22%. The calculator with a 32% current rate and 22% retirement rate shows Traditional winning by a wide margin. He can also convert some Traditional money to Roth in low-income years between retirement and Social Security claiming.

Common Mistakes to Avoid

• Assuming your retirement rate will be lower: This is often true but not always. Pensions, large RMDs, Social Security, and part-time work can keep your retirement rate high. Run the numbers with both a lower and a higher retirement rate to see the range.
• Ignoring the employer match: Employer matches always go into the Traditional side pre-tax, even if you choose Roth for your own contributions. You cannot control the match's tax treatment, so factor it into your overall tax diversification.
• Forgetting RMDs: Traditional 401(k)s require minimum withdrawals starting at age 73, which can push you into a higher bracket. Roth 401(k)s also have RMDs, unlike Roth IRAs, though SECURE 2.0 will eliminate Roth 401(k) RMDs starting in 2024 onward. Check current rules.
• All-or-nothing thinking: You can split contributions between Roth and Traditional within the same plan. Many savers do Roth early in their career and shift to Traditional as their income rises.

Limitations of This Calculator

This tool compares equal pre-tax contributions and assumes constant tax rates over your career and retirement. It does not model changing tax brackets, Roth conversions, required minimum distributions, state taxes, the additional 0.9% Medicare tax, or the net investment income tax. It assumes the same investment return in both accounts, which is reasonable since the investment options are identical. The employer match is not modeled, since it always goes to the Traditional side. Tax law can change, which would affect the comparison. For a full retirement income plan, consult a financial advisor or use our Retirement Calculator.

Authoritative Research and Resources

• IRS: Retirement Topics - Designated Roth Account - The official IRS guide to Roth 401(k) contributions, qualified distributions, and the five-year rule.
• IRS: 401(k) and Profit-Sharing Plan Contribution Limits - The official IRS page covering the 2026 elective deferral limit, catch-up contributions, and the annual additions limit.

For related tools, project your full 401(k) balance with our 401K Calculator, compare with a Roth IRA using our Roth IRA Calculator, or plan your full retirement with our Retirement Calculator.