Roth vs Traditional IRA Calculator
Compare the after-tax value of putting the same pre-tax dollars into a Traditional IRA (tax later) or a Roth IRA (tax now).
Roth vs traditional: a traditional IRA is taxed when you withdraw, a Roth when you contribute. If both rates are the same, the results match. Traditional = C × (1 + r)n × (1 − tax later); Roth = C × (1 − tax now) × (1 + r)n.
2026 limit: $7,500, plus a $1,100 catch-up at 50 and over, across all your IRAs (IRS, checked 19 October 2026).
Example: $7,500 of pre-tax income, an assumed 7% for 30 years, 22% tax now and 12% later: traditional ends at $50,240.88 after tax, Roth at $44,531.69, so traditional is $5,709.19 ahead.
Canadian? Use the RRSP vs TFSA calculator. See also the 401(k) calculator.
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Use your actual figures where available. The output is an educational estimate based on the assumptions below.
Displayed amounts are rounded to two decimal places. Keep the same currency and time period across related inputs.
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The core trade-off
A Traditional IRA contribution may be tax-deductible now, and withdrawals are taxed later. A Roth IRA contribution is made with after-tax money, and qualified withdrawals are tax-free. For the same pre-tax dollars and the same return, the account that wins is the one taxed at the lower rate: Traditional if your tax rate in retirement is lower than today, Roth if it is higher. If the rates are equal, the result is the same.
Roth = C × (1 − tnow) × (1 + r)n
Worked example: $7,500 for 30 years, 22% now vs 12% later
Take $7,500 of pre-tax income, a 7% return for 30 years, a 22% tax rate now and 12% in retirement. In the Traditional IRA, $7,500 grows to $57,091.91 and is worth $50,240.88 after 12% tax. In the Roth, 22% tax leaves $5,850, which grows to $44,531.69 tax-free. The Traditional IRA comes out $5,709.19 ahead because the later tax rate is lower. Swap the two rates and the Roth wins by the same logic.
2026 IRA rules to know (IRS)
- The IRA contribution limit is $7,500 for 2026, plus a $1,100 catch-up at age 50 and over, shared across all your Traditional and Roth IRAs.
- Roth IRA contributions phase out above income limits, and Traditional IRA deductions can be limited if you or a spouse have a workplace plan. Check the IRS pages below for your situation.
- Required minimum distributions apply to Traditional IRAs, not to Roth IRAs during the owner's lifetime.
Sources
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Dated figures on this page are tracked in the figures update log.
Frequently asked questions
Which is better, a Roth or a Traditional IRA?
It depends mainly on whether your tax rate in retirement will be higher or lower than today. Lower later favours Traditional; higher later favours Roth.
What is the IRA contribution limit for 2026?
$7,500, plus a $1,100 catch-up contribution if you are 50 or older, across all your IRAs.
Why compare the same pre-tax amount?
Because a Roth contribution costs you more today: to put $7,500 into a Roth you also pay the tax on it. Comparing equal pre-tax dollars keeps the comparison fair.
Does this check Roth income limits?
No. Check the IRS Roth IRA page for the current income phase-out ranges.
Which is better, a Roth or traditional IRA?
It mainly depends on your tax rate now versus in retirement. If you expect a lower rate later, traditional usually comes out ahead; if you expect a higher rate later, Roth usually does. With equal rates the results are the same.
What is the IRA catch-up contribution for 2026?
$1,100 for people aged 50 and over, on top of the $7,500 limit, according to the IRS.
Worked example: what does a $7,500 IRA contribution save in tax now?
If the contribution is fully deductible and your marginal rate is 22%, a traditional IRA saves $1,650 of tax this year. A Roth saves nothing now, but qualified withdrawals are tax-free. $7,500 is the 2026 limit under age 50.
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