Calculator  ·  Investing & Retirement

Roth or Traditional? It's a bet on your future tax rate.

Enter your numbers. See the after-tax retirement value of each path side by side.

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By WealthDelay Editorial · Reviewed for accuracy on June 20, 2026 · ✓ Uses 2026 IRS contribution limits
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Quick Answer

Roth or Traditional? Mathematically, if your tax rate is identical at contribution and withdrawal, the after-tax result is the same. Roth wins if your retirement tax rate will be higher than today (common early in your career, before raises). Traditional wins if it will be lower (common for high earners close to retirement, since retirement income is usually lower than peak working income).

The IRS combined 401(k)/403(b) employee contribution limit for 2026 is $23,500 ($31,000 if 50+) across Roth and Traditional contributions combined.

Your Parameters
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Contribution
Tax Rates
Your best guess — most people's effective rate drops somewhat in retirement
Time & Growth
Better After-Tax Choice
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calculating…
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What This Really Means
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Full Breakdown
Roth: after-tax value at retirement
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Traditional: pre-tax value at retirement
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Traditional: after-tax value (taxed on withdrawal)
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Difference in your favor
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Upfront tax savings today (Traditional only)
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2026 IRS contribution limits

Account Under 50 Catch-up (50+) Total 50+
401(k)/403(b) (Roth + Traditional combined)$23,500+$7,500$31,000
Roth IRA / Traditional IRA (combined)$7,000+$1,000$8,000

Roth IRA contributions phase out above MAGI $146K (single) / $230K (MFJ) for 2026 — high earners may only be able to use Roth 401(k), not Roth IRA. Ages 60–63 qualify for an enhanced catch-up of $11,250 (SECURE 2.0) instead of $7,500.

Sources & Methodology

Methodology: Roth path taxes the contribution today (no FV reduction at withdrawal). Traditional path grows the full pre-tax contribution, then applies your assumed retirement tax rate to the entire withdrawal. Both use the same future value of annuity formula with monthly compounding. This does not model required minimum distributions, state taxes, or tax-bracket changes over time — it is a simplified two-rate comparison, not a full retirement tax projection.

Common Questions

Is Roth or Traditional 401(k) better?
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It depends on whether your tax rate will be higher or lower in retirement than it is today. Roth wins if you expect a higher tax rate in retirement (common for younger savers early in their career). Traditional wins if you expect a lower tax rate in retirement (common for high earners nearing retirement). If your rate is the same both times, the after-tax result is mathematically identical.
Can I contribute to both Roth and Traditional in the same year?
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Yes. The IRS combined employee contribution limit for 401(k)/403(b) is $23,500 in 2026 ($31,000 if 50+) across BOTH Roth and Traditional accounts combined — not $23,500 each. Many savers split contributions to hedge against future tax-rate uncertainty.
Does the employer match go into Roth or Traditional?
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Historically employer matches were always pre-tax (Traditional), even if your own contributions were Roth. SECURE 2.0 (2022) now allows employers to offer a Roth match option, but it is plan-specific — check with your plan administrator.

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Disclaimer: For educational purposes only. Not financial or tax advice. Projections use historical averages and are not guaranteed. Individual tax situations vary. Consult a qualified tax professional or financial advisor before making decisions.