Roth vs Traditional Break-Even Calculator
In short: Roth contributions are taxed now and grow tax-free; Traditional contributions are deducted now and taxed on withdrawal. The deciding factor is your tax rate: if your tax rate in retirement will be lower than today, Traditional usually wins; if it will be higher, Roth wins. When the two rates are equal, the after-tax results are identical — that is the break-even point.
Source: IRS Notice 2025-67 (IR-2025-111). Data as of 2026 tax year.
These are estimates for general information, not financial advice. Verify figures with the IRS and a qualified professional before acting.
How it works
Enter your contribution, years to retirement, expected return and your tax rates now and in retirement to see the after-tax value of each account and which one comes out ahead. The result updates as you type and nothing leaves your device — every figure is computed in your browser.
2026 IRS limits used here
Source: IRS Notice 2025-67 (IR-2025-111). Announced November 2025; effective for the 2026 tax year. Data as of the 2026 tax year.
| 2026 limit | Amount |
|---|---|
| 401(k)/403(b)/457/TSP elective deferral | $24,500 |
| 401(k) catch-up (age 50+) | $8,000 (total $32,500) |
| 401(k) catch-up (ages 60–63) | $11,250 (total $35,750) |
| Combined employee + employer (415(c)) | $72,000 |
| IRA contribution (Roth or Traditional) | $7,500 |
| IRA catch-up (age 50+) | $1,100 (total $8,600) |
| Roth IRA phase-out — single | $153,000–$168,000 |
| Roth IRA phase-out — married filing jointly | $242,000–$252,000 |
Frequently asked questions
Is Roth or Traditional better?
It depends on your tax rate now versus in retirement. Roth wins if your retirement tax rate will be higher than today; Traditional wins if it will be lower. If the rates are equal, the after-tax outcome is mathematically the same.
What are the 2026 contribution limits?
For 2026, IRAs (Roth or Traditional combined) are capped at $7,500, plus a $1,100 catch-up at age 50+. 401(k) elective deferrals are capped at $24,500, plus an $8,000 catch-up at 50+. Roth IRA eligibility phases out between $153,000–$168,000 of income for single filers and $242,000–$252,000 for married filing jointly.
Why does the break-even depend only on tax rates?
With the same contribution and return, the math reduces to multiplying by (1 − tax rate). Roth applies that factor today; Traditional applies it at withdrawal. If the rate is identical in both periods, the order does not change the result — so the choice hinges entirely on which rate is lower.
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Last updated: 2026-06-14