Roth 401(k) vs Traditional 401(k) Calculator
Compare Roth and Traditional 401(k) contributions on a true after-tax basis — projected retirement balances, taxes paid now vs later, and the break-even tax rate that determines which wins.
| Metric | Roth 401(k) | Traditional 401(k) |
|---|---|---|
| Annual Contribution (gross) | — | — |
| Tax Paid On Contribution | — | — |
| Net Cost To You (today) | — | — |
| At Retirement | ||
| Pre-Tax Account Balance | — | — |
| Taxable Side-Account Balance | $0 | — |
| Tax On Withdrawal | $0 (tax-free) | — |
| After-Tax Retirement Value | — | — |
| Break-Even | ||
| Future Tax Rate That Equalizes | — | |
Roth 401(k) vs Traditional 401(k) — The Core Difference
A Roth 401(k) and a Traditional 401(k) accept the same employee contribution limits, allow the same investment menu, receive the same employer match, and have the same vesting schedules. The single difference is when you pay tax. Traditional contributions go in pre-tax — you skip income tax today, but every dollar (contributions + growth) is taxed as ordinary income when withdrawn in retirement. Roth contributions are paid with after-tax dollars — no deduction today, but qualified withdrawals (after age 59½ and 5+ years in the account) are 100% tax-free, including all the growth.
Per the IRS, the 2026 employee deferral limit for both Roth and Traditional 401(k) is $24,000 (combined), with an additional $8,000 catch-up for those 50+, and a special $11,250 super catch-up for ages 60-63 added by SECURE 2.0 (source: irs.gov). The combined Roth + Traditional cap is $24,000 — you can split between the two but not exceed the limit.
The Break-Even Tax Rate — Why It Matters
If your tax rate is identical today and in retirement, Roth and Traditional produce mathematically identical after-tax outcomes — assuming you reinvest the Traditional tax savings. The decision pivots on whether your future tax rate will be higher or lower than your current rate.
Pick Roth if you expect higher tax rates in retirement: early career with lots of room to grow income, anticipate higher federal tax rates after the One Big Beautiful Bill Act (OBBB, P.L. 119-21) sunsetting provisions, large taxable retirement income from pensions or required minimum distributions (RMDs). Pick Traditional if you expect lower rates: peak-earning years, anticipate retiring in lower-tax states, or have minimal taxable retirement income outside the 401(k).
The "Equivalent Comparison" Trap
A common misleading comparison shows Roth winning because someone contributes $10,000 to either account and ignores the tax difference. That's wrong. $10,000 in a Roth costs you $10,000 + $2,400 in taxes today (if 24% bracket) — total $12,400 out of pocket. $10,000 in Traditional costs you $10,000 — and the $2,400 tax savings, if reinvested in a taxable brokerage account, grows alongside the 401(k). The fair comparison adds back that taxable side-account. This calculator does that automatically when you select "yes" to reinvest savings.
Other Factors Beyond Tax Rate
RMDs: Traditional 401(k) requires Required Minimum Distributions starting at age 73 (rising to 75 in 2033 per SECURE 2.0). Roth 401(k) is exempt from RMDs starting in 2024 — a huge planning advantage if you don't need the money. Estate planning: Roth dollars pass to heirs tax-free; Traditional dollars are taxed at the heir's bracket. Tax diversification: Holding both Roth and Traditional gives flexibility to manage taxable income year-by-year in retirement. For more retirement scenarios, see our Traditional vs Roth IRA calculator and RMD calculator.
Last updated May 2026. Sources: irs.gov, federalreserve.gov.