Traditional vs Roth IRA Calculator
Compare a Traditional IRA versus a Roth IRA side by side. Enter your current age, annual contribution, marginal tax rates, and expected return to instantly see which account leaves you with more after-tax wealth at retirement — free, private, and no signup required.
| Age | Year | Trad. Balance | Trad. After-Tax | Roth Balance | Roth After-Tax | Difference |
|---|
Traditional vs Roth IRA — Key Differences
A Traditional IRA and a Roth IRA are both individual retirement accounts governed by the Internal Revenue Service, but they differ on when you pay taxes. With a Traditional IRA, contributions may be tax-deductible in the year you make them (reducing your taxable income now), and the money grows tax-deferred until withdrawal — at which point every dollar withdrawn is taxed as ordinary income. With a Roth IRA, you contribute with after-tax dollars (no deduction today), but qualified withdrawals in retirement — including all investment growth — are completely tax-free under IRC §408A, as detailed in IRS Publication 590-B.
| Feature | Traditional IRA | Roth IRA |
|---|---|---|
| Tax on contributions | Pre-tax (deductible*) | After-tax (no deduction) |
| Tax on withdrawals | Taxed as ordinary income | Tax-free (qualified) |
| 2026 contribution limit | $7,000 / $8,000 (50+) | $7,000 / $8,000 (50+) |
| Required minimum distributions | Age 73 (SECURE 2.0) | None during lifetime |
| Early withdrawal penalty | 10% before age 59½ | 10% on earnings before 59½ |
| Income limits | Deductibility limits apply* | Phase-out for high earners |
| Best for | Higher tax rate now than in retirement | Lower or equal tax rate now vs. retirement |
*Traditional IRA deductibility phases out if you or your spouse have a workplace retirement plan and exceed IRS income limits. Source: IRS Publication 590-A (2026). Last updated: May 2026.
When Traditional IRA Wins vs When Roth Wins
The fundamental rule: if your tax rate is higher now than it will be in retirement, a Traditional IRA wins. The tax deduction you receive today is worth more than the tax you will eventually pay on withdrawals. Conversely, if your retirement tax rate will be equal to or higher than your current rate, a Roth IRA wins — you lock in today's lower rate and every dollar of future growth is tax-free.
In practice, a Traditional IRA often wins for peak earners in the 32–37% federal bracket who expect to drop to the 22% bracket in retirement. A Roth IRA typically wins for young earners in the 10–22% bracket whose income — and tax rate — will likely grow over their career, for anyone with a long investment horizon (more years of tax-free compounding), and for those who want no RMDs for estate planning purposes. When your current and retirement tax rates are equal, the after-tax value is mathematically identical — the difference comes from additional savings from the tax deduction (Traditional) versus tax-free growth (Roth). According to IRS retirement guidance, you should evaluate both options annually as your situation changes.
2026 IRA Contribution Limits and OBBB Changes
For 2026, the IRA contribution limit remains $7,000 per year. If you are age 50 or older, a $1,000 catch-up contribution raises your limit to $8,000. These limits are set by the IRS and apply to your combined contributions across all Traditional and Roth IRAs you hold. You cannot contribute more than your earned income in a given year. Per IRS Publication 590-A, Roth IRA contributions begin to phase out in 2026 at $146,000 MAGI for single filers and $230,000 for married filing jointly.
The One Big Beautiful Bill Act (OBBB, 2025) extends and modifies several Tax Cuts and Jobs Act provisions. While OBBB does not change IRA contribution limits for 2026, it does adjust the underlying marginal tax brackets that determine which IRA is more advantageous for a given taxpayer. The 2026 ordinary income tax brackets remain 10%, 12%, 22%, 24%, 32%, 35%, and 37% for federal purposes. Because the Traditional vs Roth decision is entirely driven by your marginal rate comparison — now versus retirement — verifying your 2026 bracket at irs.gov before making annual contributions is essential.
Backdoor Roth and Conversion Strategies
High earners who exceed the Roth IRA income limits can use the Backdoor Roth IRA strategy: contribute to a non-deductible Traditional IRA (no income limit applies to contributions, only deductibility), then convert the balance to a Roth IRA. If you have no other pre-tax IRA funds, the conversion is largely tax-free — you pay tax only on any growth between contribution and conversion. The IRS's pro-rata rule (under IRC §408(d)(2)) requires that if you have existing pre-tax IRA balances, a portion of every conversion will be taxable. This is sometimes avoided by rolling pre-tax IRA funds into an employer 401(k) before executing the conversion.
A Roth IRA conversion ladder is a popular strategy for early retirees: convert Traditional IRA funds to Roth each year in retirement, paying tax at your (lower) retirement rate, and then waiting five years to access those converted funds penalty-free. This allows pre-59½ retirees to access retirement savings before the standard age threshold, as explained in IRS Publication 590-B. Roth conversions also reduce future RMDs from Traditional accounts and can lower Medicare IRMAA surcharges by keeping taxable income lower in later retirement years. Consult a qualified tax advisor (CPA or CFP) before executing large conversions, as they permanently affect your tax liability in the conversion year.