What this tool does
Compares a Traditional IRA and a Roth IRA over time under the same assumptions, showing balances and after-tax spendable amounts. You enter your current and retirement tax rates to see which comes out ahead.
How to use it
- Enter the starting balance and annual contribution.
- Enter the number of years.
- Enter the annual return rate.
- Enter your current and expected retirement tax rates, then run it.
Worked example
Starting 1,000 with 100 a year for two years at 0% return, a 20% current rate and 25% retirement rate, gives a Traditional balance of 1,200 and a Roth balance of 1,160.
Frequently asked questions
- Why is the Roth balance smaller?
- Roth contributions come from after-tax income, so the same pre-tax budget buys less inside the account. Withdrawals are then untaxed, which can reverse the ranking on an after-tax basis — read both figures.
- Does it check contribution limits?
- No. Statutory limits, income phase-outs, deduction eligibility, and withdrawal rules are not evaluated. Confirm with official sources before contributing.
What this tool does not cover
The comparison assumes US accounts and a constant return. Fees, inflation, future tax-law changes, and early-withdrawal penalties are excluded, and an existing balance is not an equal pre-tax-cost comparison.