Roth vs Pretax 401(k) Marginal Bracket 2027 Calculator
The Roth-vs-pretax decision comes down to one question: will your marginal tax bracket be higher today or in retirement? This tool uses 2027 federal brackets, factors in the side-investment of the upfront tax savings, and shows the break-even retirement rate where Roth and pretax tie.
The Core Roth vs Pretax Question
The decision is mathematically simple: contribute pretax if your current marginal bracket is higher than your retirement marginal bracket. Contribute Roth if your current bracket is lower. Equal? Same answer mathematically (commutative property of multiplication). What complicates it: side-investment of the upfront tax savings, future tax law changes, RMDs forcing taxable income, state tax differences between work state and retirement state, and Social Security taxation thresholds. This calculator handles the pure bracket math; layered considerations matter at higher net worth. Source: IRS Publication 590-A and 2027 Tax Brackets (IRS Notice 2026-XX). Last updated: May 2026.
2027 Federal Marginal Tax Brackets (Estimated, MFJ)
| Taxable Income (MFJ) | Marginal Rate |
|---|---|
| $0 – $23,650 | 10% |
| $23,650 – $96,150 | 12% |
| $96,150 – $206,700 | 22% |
| $206,700 – $394,600 | 24% |
| $394,600 – $501,050 | 32% |
| $501,050 – $751,600 | 35% |
| Above $751,600 | 37% |
The Side-Investment Adjustment
A common error: comparing $24,500 pretax to $24,500 Roth. Apples to oranges. The real comparison: $24,500 pretax saves $24,500 × marginal rate in upfront tax. If you invest that tax savings in a taxable brokerage account, it grows too — at a lower after-tax rate due to capital gains and dividend tax. The Roth side has no such side investment because you already paid tax. To compare fairly: pretax future value = (gross) × (1 - retirement rate); Roth future value = (gross × (1 - current rate)) × growth. This tool uses these formulas so the comparison is apples-to-apples.
When the Decision Is Easy vs Hard
Easy Pretax: You're in your peak earning years (32%+ bracket) with a high probability of retiring in a lower bracket. Easy Roth: You're in the 12% or lower bracket (typical for early-career workers or roles before promotions). Hard cases: anyone in the 22% or 24% bracket with high savings rates — these workers often retire with $2M+ pretax balances that trigger RMDs into the same or higher brackets. Hybrid strategies (split contributions 50/50, then convert pretax to Roth in gap years before RMDs) often beat either pure approach.