NumberTally Roth vs Traditional IRA Calculator
Should you pay tax now or later? Enter your annual contribution, expected return, and tax rates — the calculator grows both scenarios side by side, enforces the 2026 IRA contribution limits, and tells you which account leaves you with more spendable money in retirement.
Your best guess at your marginal rate when you withdraw. Lower income in retirement often means a lower rate.
Why the tie happens when tax rates are equal
Multiplication doesn’t care about order. With a Traditional IRA you grow the full contribution and pay tax at the end: contribution × growth × (1 − tax). With a Roth you pay tax first and grow what’s left: contribution × (1 − tax) × growth. When the tax rate is the same on both ends, the two formulas are identical — the math guarantees a tie. The decision only matters when your rate changes: pay tax at whichever end has the lower rate.
2026 IRA contribution limits
For 2026 you may contribute up to $7,500 per year across your Traditional and Roth IRAs combined. If you are 50 or older, an extra $1,100 catch-up contribution is allowed, for a total of $8,600. This calculator caps your annual contribution at the right limit and warns you when it does. Income phase-outs can further restrict Roth eligibility at higher incomes — check the current IRS thresholds if you earn well above average.
Which should you choose?
The rule of thumb: if you expect to be in a lower tax bracket in retirement than today, Traditional usually wins — you deduct at today’s high rate and pay at tomorrow’s low one. If you expect rates to be the same or higher (early career, rising income, or you simply believe taxes will rise), Roth usually wins or ties. Young earners in low brackets today overwhelmingly favor Roth; peak earners near retirement often favor Traditional.
Frequently Asked Questions
What is the difference between a Roth and a Traditional IRA?
Traditional: contributions may be tax-deductible now, the money grows tax-deferred, and you pay income tax on withdrawals. Roth: contributions are after-tax (no deduction), but qualified withdrawals — contributions and growth — are completely tax-free.
Why do Roth and Traditional tie when tax rates are equal?
Because multiplication is commutative: (contribution × growth × (1 − tax)) is the same number as (contribution × (1 − tax) × growth). Paying 22% before growth or 22% after growth leaves exactly the same spendable amount.
What are the IRA contribution limits for 2026?
$7,500 per year across all your IRAs combined, or $8,600 if you are 50 or older. The limit applies to the total — you cannot put $7,500 in each.
I have no idea what my retirement tax rate will be. Which do I pick?
Split the difference: many advisors suggest contributing to both, or choosing Roth early in your career (low bracket now) and shifting toward Traditional as your income — and marginal rate — climbs. Tax diversification hedges the uncertainty.
Does this account for required minimum distributions (RMDs) or the Roth five-year rule?
No — this is a pure growth-and-tax comparison. In reality, Traditional IRAs force withdrawals starting at age 73 (RMDs), while Roth IRAs have none for the original owner, and Roth earnings need a five-year holding period to be tax-free. Those rules favor Roth beyond what the numbers show.