IRA Calculator

Same balance, different keep

Contribute the same dollars at the same return and a Roth and a traditional IRA reach an identical pre-tax balance. The difference is when tax is paid. A Roth is funded with after-tax money and every dollar of the final balance is yours. A traditional IRA is funded pre-tax — it lowered your taxable income each year — but the entire balance is taxed as income on withdrawal. The after-tax figures above are the honest comparison; the headline balance alone is misleading.

The rule of thumb, and when it breaks

If your tax rate in retirement is lower than it is now, traditional usually wins: you deducted at a high rate and pay at a low one. If retirement rate is higher, Roth wins. When the rates are equal, the two are mathematically identical — which surprises people who assume Roth is always better. Where Roth genuinely pulls ahead is a subtler point: it lets you shelter more real money, because the contribution limit is the same nominal figure for both.

There is an income limit on Roth contributions

Above certain income thresholds you cannot contribute to a Roth IRA directly, and traditional IRA deductibility phases out if you are covered by a workplace plan. Those thresholds change every year. This page assumes you are eligible; check the current IRS limits for your filing status.

The annual contribution limit is shared across all your IRAs

The IRS limit is a single figure that covers every IRA you own combined, not per account. Put the maximum in a Roth and you have nothing left for a traditional in the same year. The limit rises periodically and has a catch-up amount once you turn 50. This page warns you when your contribution exceeds the current-year limit, but still projects the number you entered so you can see the effect of contributing more.

Frequently Asked Questions