⚖️ Roth vs Traditional 401(k) Calculator

Traditional contributions skip tax now and pay it in retirement; Roth pays tax now and never again. Which wins depends almost entirely on your tax rate today versus in retirement — plus one subtlety when you're maxing out the account. This calculator shows both, honestly.

Annual contribution budget ($) (pre-tax dollars you can commit each year) Marginal tax rate now (%) Expected marginal tax rate in retirement (%) Annual return (%) Years until retirement Comparison type

The one-sentence rule

With the same pre-tax budget, traditional wins if your tax rate in retirement is lower than today's; Roth wins if it's higher; they tie exactly if it's the same. That's not an opinion — it's algebra. A dollar taxed at rate t grows to the same amount whether the tax comes out before or after compounding: C·(1−t)·growth = C·growth·(1−t). Everything else about the decision is a forecast of those two tax rates.

So why does Roth so often win in practice?

The contribution cap doesn't care about tax. The 401(k) limit ($23,500 in 2025) is the same for both types. Maxing out a Roth stuffs more after-tax value inside the tax shelter than maxing out a traditional — switch this calculator to the max-out mode to see it. The traditional path only keeps pace if you faithfully invest the tax savings on the side, and the side account suffers tax drag every year.
Marginal in, (mostly) average out. Contributions save tax at your top marginal rate, but withdrawals fill the empty lower brackets first — the standard deduction and 10-12% brackets. Many retirees' effective rate on traditional withdrawals lands well below their working marginal rate, which pushes the other way, toward traditional. The honest answer uses both effects.
RMDs and flexibility. Traditional accounts force required minimum distributions from your mid-70s, taxed whether you need the money or not. Roth 401(k)s can be rolled to a Roth IRA with no RMDs, no tax on withdrawal, and tax-free inheritance for heirs.
Rate risk runs asymmetric. If tax law shifts, current statutory rates are historically low; locking today's known rate (Roth) hedges against future increases better than betting on future cuts.

Practical guidance by situation

Early career / low bracket (10-12%): Roth, almost always. You're prepaying tax at a rate you may never see again.
Peak earning years (32%+): traditional usually wins — you're very likely to withdraw at a lower rate than you're deferring at.
The murky middle (22-24%): genuinely close. Splitting contributions — or defaulting to traditional while doing Roth conversions in low-income years — hedges the forecast.
Any employer match is always pre-tax (it goes in traditional regardless), so choosing Roth for your own contributions automatically builds a mix.

Project the actual balances with the 401(k) calculator and Roth IRA calculator, check what your withdrawals could sustainably be with the retirement withdrawal calculator, and see how tax rates change your take-home today with the take-home pay calculator.

Frequently asked questions

Should I split between Roth and traditional?

Splitting is a legitimate hedge when you can't confidently predict your retirement bracket — common in the 22-24% brackets. You'll retire with both a taxable and a tax-free bucket, which also lets you manage your taxable income year by year in retirement.

Does the employer match go into the Roth side?

No. Matching dollars are always pre-tax (traditional), even if your own contributions are Roth. Under SECURE 2.0 some plans now offer Roth matching if the employer opts in, but the default remains pre-tax — so most Roth contributors end up with a mix automatically.

What if tax rates go up for everyone?

Broad rate increases favor Roth: you prepaid at the old, lower rate. Traditional contributions bet that your personal rate falls in retirement by more than any legislated increases. That asymmetry is one reason many planners lean Roth when the fair-math comparison is close.

Is the Roth 401(k) limit really the same as traditional?

Yes — $23,500 (2025) either way, plus catch-ups from age 50. That's the max-out subtlety: $23,500 of Roth is worth more after tax than $23,500 of traditional, because the Roth version has already paid its tax bill outside the cap.

This calculator is for educational purposes only and does not constitute financial advice. Results are estimates based on the inputs and assumptions shown.