Total
Contributions
Total
Growth
Current
Tax Rate
Retirement
Tax Rate
Which Option is Better?
Calculator Assumptions
This comparison assumes the same annual contribution amount to either account type. Tax savings from Traditional IRA contributions are not assumed to be reinvested, since most people use tax refunds for other purposes - like reducing debt or other spending.
Since Roth IRA contributions are made with after-tax income, your annual cash flow is reduced based on your tax bracket. For example, if you're in the 25% tax bracket and save $5,000 in a Roth IRA, the cost of choosing the Roth is $1,250 in after-tax income. So the question is: do you want more income now or savings later?
Remember that tax laws can change. This calculator provides estimates based on current rules, some of which aren't explored here. Consider consulting with a financial advisor for personalized advice.