Updated July 2026 • Based on current IRS IRA contribution and Roth IRA rules • Educational estimate, not tax advice
This calculator answers one question for the 2026 tax year: should this year's IRA contribution go to a Roth or a Traditional? It shows two comparisons side by side. The first puts the same nominal amount in either account, where the Roth always ends higher because it costs more after-tax cash today. The second — the headline — spends the same cash either way, contributing to the Traditional and investing the tax saving in a taxable account. Only the second has a break-even rate.
Break-even means the tax rate in retirement at which the two options land on a tie. Above it, the Roth ends with more after tax; below it, the Traditional does. It is derived from the same figures shown in the comparison table, not from a separate formula.
Main assumption. One contribution, a single flat return, and one marginal rate now and one in retirement. Real returns vary and real retirement income moves through several brackets, so treat the dollar amounts as a direction, not a forecast.
Biggest limitation. It does not model required minimum distributions, Social Security taxation, Medicare IRMAA surcharges, or how a withdrawal in retirement would stack across brackets. For those, use the Lifetime Tax Savings calculator.
How these figures are calculated · IRS Pub. 590-A · IRS Pub. 590-B · Tax data last verified
2026 tax inputs and methodology reviewed by Deepak Middha, Chartered AccountantMethodologyEditorial standards
| Roth | Traditional | |
|---|---|---|
| IRA contribution | $7,500 | $7,500 |
| Deductible portion | — | $750 |
| Current tax saving | $0 | $165 |
| After-tax cash it costs you today | $7,500 | $7,335 |
| Future value of IRA | $57,092 | $57,092 |
| Amount placed in the taxable side account today | — | $0 |
| Tax on withdrawal | $0 | −$11,075 |
| Total after-tax value | $57,092 | $46,017 |
| Roth | Traditional | |
|---|---|---|
| IRA contribution | $7,500 | $7,500 |
| Deductible Traditional contribution | — | $750 |
| Non-deductible basis (tax-free back) | — | $6,750 |
| Current tax saving | $0 | $165 |
| After-tax cash it costs you today | $7,500 | $7,500 |
| Future value of IRA | $57,092 | $57,092 |
| Future value of invested tax saving | — | $1,256 |
| Amount placed in the taxable side account today | — | $165 |
| Tax on Traditional withdrawal | $0 | −$11,075 |
| IRA value after that tax | $57,092 | $46,017 |
| Tax on taxable side account (15.0%) | — | −$164 |
| Side account after its own tax | — | $1,092 |
| Total after-tax value | $57,092 | $47,109 |
| Est. annual income (25y) | $2,284 | $1,884 |
On equal current cash cost, the Roth leaves you with more after tax. At this income your Traditional contribution is only partly deductible, so it gives up most of its upfront tax break while its earnings would still be taxed at about 22.0% in retirement. The break-even assumes the tax saving is invested in a taxable account whose growth is taxed at 15.0%. Leave that saving unspent in cash and the Traditional side does worse than shown. These figures reflect federal tax only — enable the state toggle to layer in state tax.
This is the whole decision in one table. Read down to your current bracket, across to the rate you expect in retirement, and the cell tells you which account ends with more after tax — and by how much.
| Rate now | Break-even | Retire at 12% | Retire at 22% | Retire at 24% | Retire at 32% | Retire at 35% |
|---|---|---|---|---|---|---|
| 12% | 10.4% | about even tie | +$6,602 Roth | +$7,744 Roth | +$12,311 Roth | +$14,024 Roth |
| 22% | 19.1% | −$4,073 Traditional | +$1,637 Roth | +$2,778 Roth | +$7,346 Roth | +$9,058 Roth |
| 24% | 20.9% | −$5,066 Traditional | about even tie | +$1,785 Roth | +$6,353 Roth | +$8,065 Roth |
| 32% | 27.8% | −$9,038 Traditional | −$3,329 Traditional | −$2,187 Traditional | +$2,380 Roth | +$4,093 Roth |
| 35% | 30.4% | −$10,528 Traditional | −$4,818 Traditional | −$3,677 Traditional | about even tie | +$2,604 Roth |
Reading the break-even column. It is the retirement rate at which the two accounts tie. Notice it sits slightly belowyour current rate rather than exactly on it: the Traditional side’s tax saving goes into a taxable account, and the tax on that account’s growth costs it a little ground. A model that lets the side account grow tax-free puts the break-even exactly at your current rate and quietly favours the Traditional.
Rates are federal marginal rates. The table holds every other assumption fixed, so it isolates the one variable that decides the answer. Your own contribution, horizon and return will change the dollar amounts — not the direction.
This tool estimates federal tax impact only unless state tax is enabled. It is not financial, tax, or investment advice.
The choice between a Roth IRA and a Traditional IRA comes down to when you pay tax. With a Roth IRA, you contribute money you have already paid tax on. It then grows tax-free, and qualified withdrawals in retirement can be completely tax-free. With a Traditional IRA, your contribution may be tax-deductible now, lowering this year's taxable income, but withdrawals in retirement are taxed as ordinary income.
Because the accounts are taxed at opposite ends, the deciding factor is usually how your tax rate today compares with your expected rate in retirement. If you think your rate will be the same or higher later, paying tax now through a Roth can leave more spendable money in retirement. If you expect a lower rate later and can deduct the contribution, a Traditional IRA can come out ahead — and the deduction frees up cash flow today.
Rather than comparing raw account balances, this calculator compares the after-tax value of each option, because a $1 balance in a Traditional IRA is worth less than $1 in a Roth once future tax is subtracted. It also assumes any upfront tax savings from a deductible Traditional contribution are reinvested, so the comparison is apples-to-apples.
The estimate is built from the inputs you control:
Beyond the headline "tax-free withdrawals," a Roth IRA has several advantages that are easy to overlook:
For 2026, you can contribute up to $7,500 if you are under 50, or $8,600 if you are 50 or older (a $1,100 catch-up). For 2025, the limits were $7,000 and $8,000. This limit is combined across your Roth and Traditional IRAs — you cannot contribute the maximum to each account separately.
Direct Roth IRA contributions also phase out by income. For 2026, the MAGI phase-out is $153,000–$168,000 for Single and Head of Household, and $242,000–$252,000 for Married Filing Jointly. Married Filing Separately phases out from $0–$10,000 if you lived with your spouse. MAGI (modified adjusted gross income) is your AGI with certain deductions added back; for most people it is close to their AGI. Direct Roth contributions have income limits, but Roth conversions are not subject to the same direct-contribution income limits.
Roth withdrawals treat contributions and earnings differently:
A backdoor Roth IRA is when someone whose income is above the direct Roth limit contributes to a non-deductible Traditional IRA and then converts it to a Roth. High earners use it because direct Roth contributions are off the table above the phase-out, while conversions are not subject to those income limits.
The catch is the IRS pro-rata rule: if you already hold pre-tax money in any Traditional, SEP, or SIMPLE IRA, the conversion is treated as coming proportionally from pre-tax and after-tax dollars, so part of it can be taxable — even the part you thought was "after-tax." A backdoor Roth is not right for everyone, and mistakes are hard to unwind. Talk to a qualified tax professional before attempting it.
A 28-year-old in the 12% bracket expects to earn — and be taxed — more later. Paying a low rate now and locking in decades of tax-free growth often points toward a Roth IRA.
A 45-year-old in the 32% bracket who is eligible for the deduction and expects a lower rate in retirement may prefer the Traditional deduction today — as long as the deduction isn't phased out.
A 58-year-old weighing a short growth horizon may value the Roth's lack of RMDs and withdrawal flexibility, but the deduction can still matter if this year's rate is high. Running both scenarios helps.
These illustrations are educational examples, not predictions or testimonials. Your result depends on your own numbers.
Neither is universally better — it depends on your tax rates. In general, a Roth IRA may work better if you expect your retirement tax rate to be the same or higher than today, because you pay tax now and qualified withdrawals can be tax-free. A Traditional IRA may work better if you can deduct the contribution now and expect a lower tax rate in retirement. The calculator compares the after-tax value of both under your own assumptions.
You enter your age, retirement age, filing status, income, contribution, expected return, and your current and expected retirement tax rates. The tool grows the same contribution in each account, applies estimated retirement tax to the Traditional balance, assumes the Traditional upfront tax savings are reinvested, and then compares the after-tax values. It also checks Roth income eligibility and Traditional deduction eligibility. It estimates federal tax only unless you enable the state toggle.
For 2026, the IRA contribution limit is $7,500 if you are under age 50 and $8,600 if you are age 50 or older (a $1,100 catch-up). For 2025 the limits were $7,000 and $8,000. This limit is combined across your Roth IRA and Traditional IRA — it is not a separate limit for each account.
Yes, you can split contributions between a Roth IRA and a Traditional IRA in the same year, but your total across both accounts cannot exceed the annual limit ($7,500 under 50, or $8,600 age 50+ for 2026). You cannot contribute the maximum to each account separately.
Direct Roth IRA contributions phase out by modified adjusted gross income (MAGI). For 2026 the phase-out is $153,000–$168,000 for Single and Head of Household, and $242,000–$252,000 for Married Filing Jointly. Married Filing Separately phases out from $0–$10,000 if you lived with your spouse. Direct Roth contributions have income limits, but Roth conversions are not subject to the same direct-contribution income limits.
Qualified Roth IRA distributions can be federally tax-free if IRS requirements are met — generally you must be at least age 59½ and have had a Roth IRA open for at least five years. Your own contributions can generally be withdrawn tax- and penalty-free at any time, but earnings have separate rules. Non-qualified early withdrawals of earnings may be subject to income tax and a 10% penalty unless an exception applies.
A Roth IRA has no lifetime required minimum distributions (RMDs) for the original owner, so you are never forced to withdraw during your lifetime. A Traditional IRA generally does have RMDs starting at the IRS-specified age. Inherited Roth IRAs may have their own beneficiary distribution rules.
The five-year rule generally requires that at least five tax years pass since your first Roth IRA contribution before earnings can be withdrawn tax-free, in addition to meeting another condition such as reaching age 59½. Separate five-year clocks can apply to Roth conversions. Your original contributions are not subject to the five-year rule.
A backdoor Roth IRA is a strategy some higher earners use when their income is above the direct Roth contribution limit: they contribute to a non-deductible Traditional IRA and then convert it to a Roth IRA. If you already hold pre-tax IRA money, the IRS pro-rata rule can make part of the conversion taxable. It is not a universal recommendation — confirm the details with a tax professional first.
Not always. If neither you nor your spouse is covered by a workplace retirement plan, your Traditional IRA contribution is generally fully deductible. If you are covered by a workplace plan, the deduction phases out over a MAGI range based on your filing status, and above that range the contribution is non-deductible (though you can still make it). Roth IRA contributions are never deductible because they are made with after-tax dollars.
To keep the estimate clear, several real-world factors are intentionally left out. Treat the output as a directional comparison, not a complete retirement plan:
Contribution limits, income phase-outs, deduction rules, and withdrawal rules on this page are based on official IRS guidance. The calculator applies standard after-tax comparison math to your inputs; it does not change any tax rule. Where a Traditional contribution is only partly deductible, the non-deductible portion is treated as basis that is not taxed again at withdrawal, while its earnings remain taxable — actual basis tracking requires Form 8606.
Written by Deepak • Updated July 2026 • Educational tax planning calculator • Reviewed against official IRS guidance
How the Roth vs Traditional Calculator works for tax year 2026, what it leaves out, and the official material behind its figures. Reviewed by Deepak Middha, Chartered Accountant · Data, formulas and sources last re-verified .
Educational use only — these figures are estimates, not a tax filing or personalized advice. Read the editorial methodology or report a correction.