Retirement

Roth vs Traditional 401(k) Calculator

The whole question is one comparison: your tax rate now against your tax rate in retirement. Roth pays the tax today and withdraws tax-free; traditional deducts today and pays tax later. When the rates are equal and you invest the traditional tax break, it is nearly a wash.

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Annual contribution

Tax rate now

Tax rate in retirement

Lower if you expect less income; higher if you expect rates to rise or to keep earning.

Annual return

Years until retirement

The traditional tax savings

Roth wins by

$46,412

After the tax each path eventually pays, measured at retirement.

With equal tax rates and the tax savings invested, the two are almost identical — Roth edges ahead only because the side account owes some tax on its growth. The real decision then rests on flexibility: Roth has no RMDs and hedges against rising rates.

Roth balance (tax-free): $1,889,216
Traditional after withdrawal tax: $1,435,804
Taxable side account: $407,000
Traditional total value: $1,842,804

Roth (tax-free)$1,889,21651%

Traditional (after tax)$1,842,80449%

Compare scenariosTry three values of one input

Vary

Roth vs Traditional 401(k) Calculator results for three values of Annual contribution
Annual contribution
Roth wins by	$41,771	$46,412+$4,641	$51,053+$9,282
Roth balance (tax-free)	$1,700,294	$1,889,216+$188,922	$2,078,137+$377,843
Traditional after withdrawal tax	$1,292,224	$1,435,804+$143,580	$1,579,384+$287,161
Taxable side account	$366,300	$407,000+$40,700	$447,700+$81,400
Traditional total value	$1,658,524	$1,842,804+$184,280	$2,027,084+$368,561

Every other input stays at the value you set above — currently $20,000 for annual contribution. Differences are measured against the first column.

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How this calculator works

Both accounts receive the same contribution and grow at the same return to the same pre-tax balance. The traditional balance is then reduced by the retirement tax rate. When the tax savings are invested, the annual saving (contribution × current rate) grows in a taxable side account, with its growth taxed at a long-term capital gains rate, and is added to the traditional side so no path is handed extra money.

Flat tax rates stand in for progressive brackets on both sides — in reality withdrawals fill brackets from the bottom, which tends to favour traditional. The value of Roth's missing RMDs, its hedge against rising rates, and estate benefits are real but not modelled. Contribution limits are not enforced.

What this assumes

Your marginal rate today and your expected rate in retirement, both entered by you. The second is genuinely unknowable decades ahead.
The same contribution amount into either account. At equal rates the two are mathematically identical — the difference only appears at the contribution limit.
State tax, required minimum distributions and the effect of withdrawals on the taxable share of Social Security are excluded.

What changes this number

The gap between your two rates: The entire comparison. If they are close, the answer is close, and splitting is a defensible hedge rather than indecision.
Whether you can contribute the maximum: If you can, the Roth effectively shelters more, because the limit is on the nominal amount rather than the after-tax cost.
Required minimum distributions: Traditional accounts force withdrawals from 73; Roth IRAs never do. Not priced here, and worth real money to some retirees.

A worked example

Take the equal rates, savings invested scenario. These figures are produced by the calculator above, not written alongside it, so they always match what the tool returns.

What you enter

Tax rate now: 24%
Tax rate in retirement: 24%
The traditional tax savings: Are invested in a taxable account

What it returns

Roth wins by: $46,412
Roth balance (tax-free): $1,889,216
Traditional after withdrawal tax: $1,435,804
Taxable side account: $407,000
Traditional total value: $1,842,804

Try an example

Equal rates, savings invested Lower rate in retirement Expecting higher rates later

Frequently asked questions

Should I choose a Roth or traditional 401(k)?

Compare your tax rate now with your expected rate in retirement. If you expect a lower rate later — common for high earners near their peak — traditional usually wins. If you expect a higher rate, or you are early-career with a low rate and decades of growth ahead, Roth usually wins.

Why is it a wash when tax rates are equal?

Because multiplication is commutative. Deducting at 24% and being taxed at 24% later gives the same result as paying 24% now and withdrawing tax-free — provided you invest the tax the traditional route saved you. If you spend that saving instead, Roth wins, because you effectively sheltered more.

Does the employer match go into the Roth?

Historically the match always went into a traditional (pre-tax) account regardless of your choice. Since SECURE 2.0, plans may offer a Roth match if you elect it, in which case it counts as taxable income in the year received. Check what your plan does.

What about required minimum distributions?

Traditional 401(k)s force withdrawals from age 73. As of 2024, Roth 401(k)s no longer have RMDs for the original owner, matching Roth IRAs. That flexibility — leaving the money untouched and tax-free — is a real advantage the balance comparison alone does not capture.

Can I contribute to both?

Yes. You can split contributions between Roth and traditional within the same plan, up to the shared annual limit. Doing so hedges against not knowing your future tax rate and gives you both taxable and tax-free money to draw from in retirement, which helps manage brackets later.

This calculator helps answer

Roth or traditional — which should I use?

The usual framing asks whether your tax rate is higher now or later. That is correct but incomplete, and it hides the reason a Roth is often the better account even at identical rates.