Roth vs Traditional 401(k) Calculator
The Roth finishes ahead when your tax rate in retirement is higher than your rate today, the Traditional finishes ahead when it is lower, and the two finish even when the rates match. Enter your yearly deferral, tax rate today, retirement tax rate, annual return and years until withdrawal in the tool above to see who finishes ahead and by how much.
For example, put $10,000 a year into a Traditional 401(k) at a 22% tax rate today, assuming a 7% annual return over 25 years. The equal-take-home Roth deferral is $7,800 a year. After 25 years, the tax-free Roth balance is $526,547, while the Traditional balance before tax reaches $675,060. If your retirement tax rate matches today's rate at 22%, the tax on the Traditional balance is $148,513, leaving $526,547 after tax. Both accounts finish even. If your retirement rate drops to 12%, the Traditional finishes $67,506 ahead; at 32%, the Roth does.
How it works
This calculator compares both accounts by holding your take-home pay constant. A Traditional deferral lowers your taxable income, so deferring $10,000 at a 22% tax rate costs $7,800 in take-home pay. A Roth deferral comes out of after-tax pay, so $7,800 into a Roth costs the same $7,800 of take-home pay. Over 25 years, you defer $250,000 into the Traditional account or $195,000 into the Roth. Month-end contributions compound monthly at one twelfth of the annual return, growing the balances over the full term.
Because both balances grow by the same return factor, that factor cancels out in the comparison. The break-even retirement tax rate always equals your tax rate today. If your tax rate stays at 22% in retirement, the tax on the $675,060 Traditional balance is $148,513, leaving an after-tax balance of $526,547 that ties the Roth. If your retirement rate drops to 12%, the Traditional tax is $81,007, leaving $594,053 after tax. That gives the Traditional account a $67,506 advantage. If your retirement rate rises to 32%, the Traditional tax is $216,019, leaving $459,041 after tax. That gives the Roth a $67,506 win.
IRS contribution rules set the ceiling on how much you can defer each year. For 2026, the IRS employee deferral limit is $24,500. Deferring that full $24,500 into a Traditional 401(k) lowers your taxable income by $24,500. At a 22% tax rate, that creates $5,390 less federal income tax this year than putting the maximum into a Roth. Contributing the full limit to a Roth therefore requires $5,390 more out of your take-home pay. You can split annual elective deferrals between both accounts, provided your combined total stays within the legal limit. Savers aged 50 and over can generally make an $8,000 catch-up contribution if the plan allows it, raising their total to $32,500, while the catch-up limit for ages 60, 61, 62, and 63 is $11,250.
According to the IRS Roth comparison chart, designated Roth 401(k) withdrawals of contributions and earnings are tax-free if the distribution is qualified. A qualified distribution requires holding the account for at least 5 years and taking the payout on or after age 59 and a half, upon disability, or after death. Traditional pre-tax withdrawals are subject to federal and most state income tax. The IRS required minimum distribution guidance notes that original owners do not have to take distributions from designated Roth accounts while alive.
The calculator applies flat tax rates, assumes the same investment return for both options, assumes your Roth withdrawals are qualified, and does not model progressive tax brackets, employer matches, plan fees, or state-specific rules. The starting values are placeholders that you can adjust for your own situation. The calculator compares the two accounts; it does not choose one for you. For the full side-by-side, read our Roth 401(k) vs Traditional 401(k) comparison or check the 2026 401(k) limits guide.
Frequently asked questions
Is it better to use a Roth or traditional 401(k)?
The Roth is better if your tax rate in retirement will be higher than your rate today, and the Traditional is better if it will be lower. In our worked example, if your tax rate falls from 22% today to 12% in retirement, the Traditional 401(k) finishes ahead by $67,506. If your rate rises to 32% in retirement, the Roth finishes ahead by $67,506, while equal 22% rates result in a tie. Use the calculator to run your own rates.
What is the break-even tax rate for a Roth vs a traditional 401(k)?
The break-even retirement tax rate equals your tax rate today. Because both accounts experience the same investment compounding over time, the growth factor cancels out completely. If your retirement tax rate matches your current tax rate, both accounts provide the same after-tax spending money.
Why is the Roth deferral smaller than the Traditional deferral in this calculator?
The calculator equalizes your take-home pay between the two options. Traditional contributions use pre-tax dollars, which reduces your current taxable income and lowers your tax bill. A Roth contribution uses after-tax dollars, so you must contribute a smaller dollar amount to give up the same take-home pay.
How do I know what my tax rate will be in retirement?
No one can know their future tax rate with certainty. You can review current brackets on the IRS federal income tax rates page and test several different retirement rates in the calculator.
Can I split my contributions between a Roth and a traditional 401(k)?
Yes, if your plan offers both, you can split your annual deferrals between them. Your combined elective deferrals cannot exceed the 2026 annual limit of $24,500. Savers aged 50 and over can generally add an $8,000 catch-up contribution if the plan allows it, which raises their overall deferral limit to $32,500.
When are Roth 401(k) withdrawals tax-free?
Roth 401(k) distributions are tax-free when they meet IRS qualified distribution rules. You must have held the account for at least 5 years. The payout must also occur on or after age 59 and a half, as a result of disability, or after your death.
Do I have to take required minimum distributions from a Roth 401(k)?
Original account owners do not have to take required minimum distributions from designated Roth accounts during their lifetime. Beneficiaries who inherit a designated Roth account, however, remain subject to IRS distribution rules.
What does this calculator leave out?
The tool does not model employer matching contributions, plan administrative fees, state tax nuances, or progressive tax brackets. It also leaves out annual IRS contribution caps. For more details on these rules, read our Roth 401(k) vs Traditional 401(k) comparison and our overview of 2026 401(k) limits.
Sources
We prioritize primary sources for rules, formulas, rates, limits, and definitions. See our calculator methodology and editorial policy.