A Roth IRA taxes your contribution now and lets the growth come out tax-free. A traditional IRA deducts the contribution today and taxes every dollar you withdraw later. Both share the same $7,500 cap for 2026, so the choice is a bet on tax rates, and the refund you get from the traditional side is the swing factor. Enter your rates, income, and timeline, and this calculator shows what each path is worth after tax and where the break-even sits.
Both accounts shelter the same investments for the same decades, and both share one contribution cap: for 2026 the IRS allows $7,500 across all your IRA accounts combined, or $8,600 from age 50 with the $1,100 catch-up, per Notice 2025-67. What separates them is when the taxman gets paid. A traditional IRA contribution is deducted from this year's income, so the government effectively funds part of it, but every dollar of the balance is taxed as ordinary income on the way out. A Roth contribution is made with after-tax money, hurts a little more today, and never owes another cent, not on the growth and not on withdrawals after age 59 and a half.
The comparison therefore has three moving parts: your marginal rate today, your expected rate in retirement, and what you do with the refund the traditional side hands you. Most comparisons quietly assume the refund disappears, which flatters the Roth enormously. This calculator tracks the refund explicitly, because a saver who invests it and a saver who spends it reach genuinely different answers.
Variables in plain terms. r is the expected annual return, applied monthly like the other calculators on this site. Retirement rate is the marginal rate you expect to pay on traditional withdrawals. The refund is the tax saved this year by deducting the contribution. The side account grows at the same return in a taxable account, and its gains are taxed once at the end at a 15% long-term capital gains rate. The break-even rate is the retirement tax rate at which the traditional path ties the Roth path; below it traditional wins, above it the Roth wins.
Take the default setup: $7,500 a year for 25 years at 6%, 24% marginal rate now, 22% expected in retirement. The balance reaches $422,681 either way, since both accounts hold identical investments. Spend the refund and the traditional route nets $329,691 after retirement tax, leaving the Roth ahead by $92,990. That gap is not a Roth superpower; it is simply the 22% tax on the whole balance, unpunished because the traditional side's refund vanished into spending.
Now invest the refund. The $1,800 saved each year compounds into a side account worth $101,443 before tax: $45,000 of principal and $56,443 of gains. Taxing the gains once at 15% leaves $92,977, and the traditional path totals $422,668, within $13 of the Roth. The lesson is structural: with the refund reinvested, equal tax rates produce a near tie, and the decision collapses into the rate bet plus a small capital-gains drag. The break-even retirement rate in this example is about 22.0%, which sits almost exactly two points below the current 24% rate. Traditional wins at 20%, ties near 22%, loses at 24% or higher.
| Retirement rate | Traditional, refund spent | Traditional, refund invested | Roth IRA |
|---|---|---|---|
| 10% | $380,413 | $473,389 | $422,681 |
| 12% | $371,959 | $464,936 | $422,681 |
| 22% | $329,691 | $422,668 | $422,681 |
| 24% | $321,237 | $414,214 | $422,681 |
| 32% | $287,423 | $380,400 | $422,681 |
The table holds the defaults fixed and moves only the expected retirement rate. Two patterns stand out. First, the spent-refund column never beats the Roth at any positive tax rate, which is the trap behind many Roth-advocate comparisons. Second, the invested-refund column swings hard: at a 10% retirement rate traditional finishes $50,709 ahead, while at 32% it falls $42,281 behind. Time horizon barely changes the ranking; at a 10-year horizon the same defaults put the Roth $22,340 ahead with the refund spent and $1,075 behind with it invested. Savers aged 50 and over scale the whole table by the $8,600 limit, and the same near-tie structure holds.
Before the rate bet matters, eligibility does. Direct Roth contributions phase out between $153,000 and $168,000 of modified AGI for single filers and $242,000 to $252,000 for joint filers in 2026, per IRS Notice 2025-67. A single filer with $160,000 of MAGI, mid-range, can only put about $4,000 into a Roth this year; a joint filer at $247,000 is capped near $3,750. Above the top of the range the direct route closes entirely, though the backdoor conversion through a non-deductible traditional IRA remains open, subject to the pro-rata rule if you hold other pre-tax IRA balances.
Traditional deductibility has its own gates. If neither you nor your spouse is covered by a retirement plan at work, the deduction is unrestricted. With coverage, the deduction phases out between $81,000 and $91,000 of MAGI for single filers and $129,000 to $149,000 for joint filers in 2026. A non-deductible traditional contribution still defers tax on growth, but the headline comparison in this calculator assumes the contribution is fully deductible. If your contribution would not be deductible, the Roth is usually the obvious choice, and the calculator's eligibility line will tell you so.
The IRA decision is one piece of a retirement plan. The SIMPLE vs 401k calculator handles the employer-plan ceiling, where the $24,500 limit dwarfs the IRA's $7,500, and the same rate-bet logic applies to Roth 401(k) elections. The retirement withdrawal calculator works the other end, showing what a balance can safely pay out and why a tax-free Roth balance stretches further per dollar. The compound interest calculator projects any contribution schedule over any horizon. Together they cover contribute, grow, and withdraw.
Neither is universally better; the winner is decided by tax rates. If your contributions are equal and you spend the traditional IRA's tax refund, the Roth always ends ahead by exactly the retirement tax on the balance. If you invest the refund instead, the two are nearly identical when your tax rate stays the same, and the traditional IRA wins whenever your retirement rate falls below the break-even point, which the calculator computes for your inputs.
For 2026 the IRS set the combined IRA contribution limit at $7,500, up from $7,000 in 2025, per Notice 2025-67. The cap is shared across all your traditional and Roth IRA accounts, so you cannot put $7,500 into each. Savers aged 50 and over can add a $1,100 catch-up, bringing their total to $8,600. The first-ever inflation adjustment of the IRA catch-up took effect in 2026 under SECURE 2.0.
For 2026, direct Roth IRA contributions phase out between $153,000 and $168,000 of modified AGI for single filers and between $242,000 and $252,000 for married couples filing jointly, per IRS Notice 2025-67. Above the top of the range you cannot contribute directly, though a backdoor Roth conversion through a non-deductible traditional IRA remains available at any income. A married filer with $247,000 of MAGI, mid-range, can put roughly $3,750 into a Roth.
If neither you nor your spouse is covered by a retirement plan at work, your traditional IRA contribution is fully deductible at any income. If you are covered, the deduction phases out between $81,000 and $91,000 of MAGI for single filers and $129,000 to $149,000 for joint filers in 2026. A non-deductible contribution still grows tax-deferred, but the comparison in this calculator assumes the contribution is deductible; if yours is not, the Roth usually becomes the clear choice.
A deductible $7,500 traditional IRA contribution saves $1,800 for a saver in the 24 percent bracket. Spent, that money is gone and the Roth wins by the entire retirement tax on the balance, about $92,990 in the default example. Invested at the same return, the refund compounds into a side account worth roughly $92,977 after tax, and the two paths converge to a $13 gap. The refund is the whole ballgame, which is why disciplined savers capture more value from the traditional side.
Yes, and it favors the Roth. Traditional IRAs require minimum distributions starting at age 73 under SECURE 2.0, and each withdrawal is taxed as ordinary income, which can push you into a higher bracket. Roth IRAs have no lifetime RMDs for the original owner, so the balance can keep compounding untouched and pass to heirs tax-free. If you expect a large traditional balance, remember that its effective tax cost includes being forced into taxable withdrawals on a schedule you do not control.
All calculation logic on this page is implemented from the primary documents below. Each one is listed with the figure it supplies, so any rate or threshold in the result can be traced back to its published source.
Contribution limits and plan rules for the current tax year on every page.