401(k) vs. Roth IRA Calculator
Compare the after-tax retirement value of pre-tax 401(k) contributions versus after-tax Roth contributions, based on your current tax rate, expected retirement tax rate, investment return and time horizon.
- Page updated:
- Jul 14, 2026
- Tool version:
- v1.1.0
Overview
A 401(k) and a traditional IRA are funded with pre-tax dollars: you deduct the contribution now and pay income tax when you withdraw in retirement. A Roth 401(k) or Roth IRA works the other way around: you contribute after-tax dollars now, and qualified withdrawals are completely tax-free.
This calculator compares the after-tax value of the same gross contribution under both approaches, so you can see which one leaves you with more money in retirement given your tax rates today and later.
Results
Future-value annuity factor
94.4608
Total contributed
$210,000.00
Traditional 401(k) — balance before tax
$661,225.50
Traditional 401(k) — after-tax value
$515,755.89
Roth — after-tax value
$502,531.38
Advantage (Traditional − Roth)
$13,224.51
Which account wins
Traditional 401(k) — a lower tax rate in retirement favors pre-tax contributions.
How to read the result
- What it means
- The displayed value is an estimate based on your inputs. It represents the calculated scenario under current assumptions, not a guaranteed amount.
- Next step
- Use the result as a starting point. Adjust parameters to compare scenarios and validate with a professional when needed.
- Calculation limits
- The model uses simplified formulas and cannot account for all variables in your specific case (local regulations, personal conditions, temporal changes).
Methodology
Both accounts are assumed to receive the same gross annual contribution, earning the same return, contributed at the end of each year (an ordinary annuity).
Future-value factor: with annual return r over n years, a constant annual contribution grows by a factor of ((1 + r)^n − 1) / r.
Traditional 401(k): the full contribution is invested pre-tax and the entire balance is taxed at withdrawal. After-tax value = contribution × factor × (1 − retirement tax rate).
Roth: the contribution is made from after-tax income, so the amount invested is reduced by today's tax, but withdrawals are tax-free. After-tax value = contribution × (1 − current tax rate) × factor.
Decision rule: because the growth factor is identical, the traditional account wins whenever your retirement tax rate is below your current rate, and the Roth wins whenever it is higher. They tie when the two rates are equal.
Educational estimate only. It ignores employer matching, required minimum distributions, contribution-limit differences between accounts, state taxes, inflation and Roth IRA income eligibility limits. Sources: IRS.gov.
Key takeaways
Compare the after-tax retirement value of pre-tax 401(k) versus Roth contributions. Traditional wins when your retirement tax rate is lower than today's; Roth wins when it is higher.
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Savings & InvestmentWorked examples
Lower tax rate in retirement
$7,000 per year for 30 years at 7%, 24% now and 22% in retirement.
Interpretation
The growth factor is about 94.46. Traditional after-tax ≈ $515,756 versus Roth ≈ $502,531. The traditional 401(k) wins because the retirement rate (22%) is below today's rate (24%).
Higher tax rate in retirement
$7,000 per year for 30 years at 7%, 22% now and 28% in retirement.
Interpretation
Traditional after-tax ≈ $476,082 versus Roth ≈ $515,756. Here the Roth wins because you expect a higher tax rate (28%) at withdrawal than today (22%).
Frequently asked questions
What is the difference between a 401(k) and a Roth?
A traditional 401(k) or IRA gives you a tax deduction today and taxes your withdrawals in retirement. A Roth account gives no deduction today, but qualified withdrawals are tax-free. The better choice depends mainly on whether your tax rate will be higher or lower in retirement than it is now.
Which account should I choose?
If you expect a lower tax rate in retirement, pre-tax (traditional) contributions usually win. If you expect a higher rate, the Roth usually wins. If the rates are similar, the outcomes are nearly identical and tax diversification — holding some of each — can be valuable.
What are the 2026 contribution limits?
For 2026 the elective deferral limit is $24,500 for a 401(k) and $7,500 for an IRA or Roth IRA, with additional catch-up contributions for those 50 and older. Roth IRA eligibility also phases out at higher incomes. Check IRS.gov for the current figures that apply to you.
Is this financial advice?
No. This is an educational estimate that simplifies many factors, including employer matching, required minimum distributions and state taxes. Consult a qualified tax advisor or financial planner before making decisions.
Sources & references
- IRS - 401(k) plans: https://www.irs.gov/retirement-plans/401k-plans
- IRS - Roth IRAs: https://www.irs.gov/retirement-plans/roth-iras
- IRS - Retirement topics: contribution limits: https://www.irs.gov/retirement-plans/plan-participant-employee/retirement-topics-contributions
Quality & oversight
- Author
- Ugo Candido, MBA
- Maintained by
- Ugo Candido, MBA
- Page updated
- Jul 14, 2026
- Tool version
- v1.1.0