Roth vs. Traditional Calculator

Direct Answer

This calculator compounds a single hypothetical contribution at the annual return and number of years you enter, then applies tax at your current marginal rate for a Roth (taxed before growth) or your expected retirement rate for a Traditional (taxed after growth), and reports which after-tax value is larger. The comparison is therefore driven almost entirely by which of those two rates you expect to be higher. It does not predict future tax law or recommend an account type.

How Do You Calculate Roth vs. Traditional After-Tax Value?

Traditional after-tax value = contribution × (1 + return)^years × (1 − retirement tax rate). Roth after-tax value = contribution × (1 − current tax rate) × (1 + return)^years. Both formulas grow the same contribution at the same return over the same period; they differ only in whether tax is paid before the growth (Roth) or after it (Traditional).

Roth vs. Traditional Comparison Calculator

Results are mathematical estimates under the assumptions you enter, for education only. Not personalized tax advice, and not a recommendation to choose one account type over another.

Enter a contribution amount, years until retirement, expected annual return, and your current and expected retirement marginal tax rates.

All calculation happens locally in your browser. No values are sent to any server or captured in analytics.

What This Calculator Does

It compounds a single hypothetical contribution at your entered annual return for the number of years you enter, then applies tax at your current marginal rate (Roth, taxed before growth) or your expected retirement marginal rate (Traditional, taxed after growth), and reports which after-tax value is larger under those assumptions.

It does not predict future tax law, recommend an account type, or replace advice from a qualified tax professional. It only turns the numbers you enter into a consistent, formula-based comparison, exactly as described in Swoopr's Roth IRA vs. Traditional IRA guide.

Required Inputs

• Contribution amount, the hypothetical dollar amount contributed in a single year. This calculator does not enforce any specific year's IRA or 401(k) contribution limit; enter whatever amount you want to model.
• Years until retirement, how long the contribution stays invested before withdrawal.
• Expected annual return (%), the constant annual growth rate assumed for both accounts.
• Current marginal tax rate (%), your marginal tax rate today, applied to the Roth contribution before it grows.
• Expected marginal tax rate in retirement (%), your assumed marginal tax rate when you withdraw, applied to the Traditional balance.

The Formulas

Both accounts start from the same contribution and grow at the same rate:

Growth multiple = (1 + annual return)^years

Traditional after-tax value = contribution × growth multiple × (1 − retirement tax rate): the full pre-tax contribution compounds, then tax is paid once, on the way out.

Roth after-tax value = contribution × (1 − current tax rate) × growth multiple: tax is paid once, up front, on the smaller after-tax contribution, which then compounds tax-free.

Because multiplication is commutative, when the current tax rate equals the retirement tax rate, these two formulas produce the exact same after-tax value. The only thing that changes the winner is a difference between the two tax rates: a lower expected rate in retirement favors Traditional, a higher expected rate in retirement favors Roth.

Worked Example

Hypothetical example, for education only.

An investor contributes $10,000, expects a 25% marginal tax rate today, a 15% marginal tax rate in retirement, an 8% annual return, and plans to withdraw in 10 years.

1. Growth multiple: 1.08¹⁰ = 2.1589
2. Traditional after-tax value: $10,000 × 2.1589 × (1 − 0.15) = $18,350.86
3. Roth after-tax value: $10,000 × (1 − 0.25) × 2.1589 = $16,191.94
4. Difference: Traditional produces $2,158.92 more after-tax value under these assumptions

Flip the tax-rate assumptions so retirement is expected at 30% instead of 15%, holding everything else constant, and Traditional falls to $15,112.47 while Roth stays at $16,191.94, since Roth's tax is locked in today at 25% regardless of what the retirement rate later turns out to be, making Roth the larger after-tax value in that scenario.

How to Interpret the Results

The result is only as reliable as the tax-rate assumptions behind it. The hardest input to estimate is usually the expected retirement tax rate, which depends on future tax law, your future income, filing status, and where your withdrawals land relative to the tax brackets in effect at that time, none of which are known today.

Treat the comparison as a sensitivity check, not a forecast: try a few different retirement-tax-rate assumptions and see how much the answer moves. A comparison that flips between Roth and Traditional over a small change in the assumed rate is telling you the two options are close, not that one is clearly correct.

Common Mistakes

• Assuming your tax rate will be the same as it is now, when income, deductions, filing status, or tax law could all change by retirement.
• Comparing pre-tax numbers instead of after-tax numbers, a Traditional balance looks larger before tax is subtracted, but that comparison is misleading, since the Traditional balance still owes tax and the Roth balance does not.
• Ignoring required minimum distributions, which can force Traditional withdrawals (and the resulting tax) on a schedule that doesn't match your actual spending needs. This calculator does not model RMDs.
• Treating the result as a single right answer, rather than as one comparison under one set of assumptions that can reasonably vary.

Limitations and Edge Cases

• This models a single lump-sum contribution grown at a constant annual return, not a series of annual contributions, variable returns, or dollar-cost averaging.
• It does not enforce or reference any specific year's IRA or 401(k) contribution limit, since those change by year and account type; the contribution amount is a free input.
• It does not model required minimum distributions, state income tax, employer matching, early-withdrawal penalties, the five-year rule, or changes to tax law between now and retirement.
• Marginal tax rate is treated as a single flat percentage applied to the entire contribution or balance, not a graduated bracket calculation.

Privacy and Data Handling

All calculations run in your browser. Values you type into this calculator are not sent to Swoopr Investment's servers, stored, or logged; closing or reloading the page clears them. No account or sign-in is required to use this tool.

Roth vs. Traditional FAQs

References

• IRS: Roth IRAs: official guidance on Roth IRA contribution and withdrawal tax treatment referenced by this calculator's Roth formula.
• IRS: Traditional IRAs: official guidance on Traditional IRA deductibility and withdrawal tax treatment referenced by this calculator's Traditional formula.

Results are mathematical projections from the contribution, years, return, and tax rates you enter, holding those inputs constant; they are a planning baseline, not a prediction or a substitute for advice from a qualified tax professional.