Roth Or 401k Calculator
Compare the after-tax value of investing in a Roth IRA vs a Traditional 401(k) based on current and future tax rates, investment growth, and time horizon.
Published by:
isCalculator Editorial Team
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How to use this tool?
How to Use the Roth vs 401(k) Calculator
This calculator compares the after-tax future value of a Roth IRA (after-tax contributions, tax-free withdrawals) versus a Traditional 401(k) (pre-tax contributions, taxed on withdrawal). Follow these steps:
- Enter your annual contribution – The amount you plan to contribute each year (e.g., $6,000).
- Provide your current age – Your age in years (e.g., 30).
- Set your retirement age – The age at which you will withdraw the money (e.g., 65). Must be greater than your current age.
- Input the expected annual return – As a percentage (e.g., 7% for 7).
- Enter your current tax rate – Your marginal tax rate now (e.g., 22% for 22).
- Enter your future tax rate – Your expected tax rate in retirement (e.g., 22% for 22).
- Click "Calculate" – The results show the after-tax future value for both accounts, plus a formula breakdown.
Note: All rates are percentages (0–100). The calculator assumes a single annual contribution and no inflation. For accurate comparisons, use realistic tax rates and returns.
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Frequently Asked Questions
A Roth IRA uses after-tax contributions, so withdrawals are tax-free. A Traditional 401(k) uses pre-tax contributions, but withdrawals are taxed as ordinary income.
If your current tax rate is higher than your future tax rate, a Traditional 401(k) may be better. If your future tax rate is higher, a Roth IRA may be better.
No, this calculator only compares the tax treatment of contributions. Employer matches are additional benefits not included.
