Compare a traditional IRA with a Roth IRA after tax.
With a 24% tax rate now and 22% in retirement, contributing $7,500 a year for 30 years at 7%: traditional ahead after tax by $15,249.64 after tax.
A traditional IRA gives a tax deduction now and is taxed when you withdraw; a Roth IRA uses after-tax money and is tax-free later. This calculator assumes both cost you the same out of pocket, grows each, and compares the balances after tax in retirement given your tax rate today and your expected rate then.
If you expect a higher tax rate in retirement the Roth tends to win; if lower, the traditional IRA does. Eligibility and deductibility depend on income and workplace plan coverage. See the Roth IRA Calculator, the 401(k) Calculator and the RMD Calculator.
The calculator applies the standard financial formulas step by step.
| Item | Value |
|---|---|
| Annual contribution limit | $7,500.00 |
| Traditional contribution (pre-tax) | $7,500.00 |
| Equivalent Roth contribution (after tax) | $5,700.00 |
| Traditional balance at retirement | $762,481.87 |
| … after 22% tax on withdrawals | $594,735.86 |
| Roth balance (tax-free) | $579,486.22 |
| Difference (Roth − traditional) | −$15,249.64 |
| Case | Result |
|---|---|
| Tax now 12%, later 22% | $76,248.19 |
| Tax now 24%, later 22% | $15,249.64 |
| Tax now 24%, later 32% | $60,998.55 |
| Tax now 32%, later 22% | $76,248.19 |
| Return 5% | $10,403.23 |
Traditional contributions may be deductible but withdrawals are taxed; Roth contributions are not deductible but qualified withdrawals are tax-free.
$7,500, plus a $1,100 catch-up for those 50 and older.
When your tax rate in retirement is likely to be higher than today's, or you value tax-free flexibility.
When your tax rate now is higher than you expect in retirement and your contribution is deductible.
No. Deductibility depends on your income and whether you or your spouse have a workplace retirement plan.
Traditional IRAs have RMDs starting at 73 or 75; Roth IRAs do not during the owner's lifetime.
It uses the standard formula: traditional (after tax) = FV(c) × (1 − t₂) Roth = FV(c × (1 − t₁)) The full method and a worked example are shown on this page.
No. The calculator gives estimates for planning and learning. Real offers vary by lender, product and date, so confirm the details with your bank, lender or a qualified adviser before deciding.
Yes. The maths is identical in any currency; only the currency symbol shown in the results differs.
No. Everything is calculated in your browser and nothing you enter is uploaded or saved.
