Roth 401k vs Traditional 401k 2026 Comparison Calculator
See which account wins for your situation — enter your contribution, current tax bracket, expected retirement bracket, growth rate, and years to compare net after-tax retirement balances side-by-side using the 2026 contribution limit of $23,500.
Roth 401k vs Traditional 401k — The Core Difference
Traditional 401k contributions are pre-tax — you reduce taxable income now and pay ordinary income tax on all withdrawals in retirement. Roth 401k contributions are after-tax — you pay tax now and all qualified withdrawals (including gains) are completely tax-free. The 2026 contribution limit is $23,500 for both types combined (or $31,000 for employees 50+, and $34,750 for ages 60–63 under SECURE 2.0). Source: IRS Notice 2024-80. Last updated: May 2026.
Which One Wins? — The Tax Bracket Rule
| Situation | Choose | Reason |
|---|---|---|
| Current bracket > retirement bracket | Traditional | Save tax at high rate now, pay lower rate in retirement |
| Current bracket = retirement bracket | Either (or split) | Mathematically equivalent before TCJA/rate uncertainty |
| Current bracket < retirement bracket | Roth | Pay low rate now, avoid higher rate in retirement |
| Early career, low income | Roth | Decades of tax-free compounding on low-rate contributions |
| High income, near retirement | Traditional | Immediate tax deduction at 37% bracket |
SECURE 2.0 and 2026 Rule Changes
Starting in 2024, Roth 401k accounts eliminated RMDs — you are no longer forced to withdraw at age 73, unlike Traditional 401k. This makes Roth 401k ideal for estate planning: the tax-free balance can grow and transfer to heirs. Additionally, under SECURE 2.0, employer matching contributions can now be designated as Roth (after-tax), though they are taxable in the year contributed. These changes tilt the long-term advantage toward Roth for younger workers and those with strong estate planning needs.