Roth vs. Traditional Decider
Answer four questions and get a personalized recommendation that shows its assumptions.
How to read this
What determines the winner
Roth wins
Your tax rate in retirement is higher than it is today. You are better off paying the lower tax bill now and keeping everything at withdrawal.
It is a toss-up
Your tax rate in retirement is roughly the same as today. Both accounts produce nearly identical after-tax outcomes — other factors like flexibility and income limits become the tiebreaker.
Traditional wins
Your tax rate in retirement is lower than it is today. Deferring your tax bill until retirement means paying less overall — the pre-tax compounding advantage is worth it.
The tool above calculates exactly which scenario applies to your situation based on your income and retirement tax rate assumption. Adjust the Expected retirement tax rate selector to see how the outcome changes.
Roth means you pay income tax on the money before it goes into the account. The money then grows tax-free, and you owe nothing when you withdraw it in retirement. You're paying the tax bill today in exchange for a tax-free future.
Traditional is the opposite. You contribute pre-tax dollars — lowering your taxable income today — and the money grows untouched until retirement. When you withdraw it, every dollar is taxed as ordinary income at whatever rate applies at the time.
Why net after-tax value is the only fair comparison. A Traditional account's balance looks bigger on paper because the IRS still owns a slice of it. The Roth balance is yours, free and clear. Comparing the two without accounting for taxes overstates Traditional. The only honest comparison is what you actually get to keep after the IRS takes its share — which is exactly what this tool calculates.
The retirement tax rate assumption matters most. Every other input here moves the answer a little. This one moves it a lot. If your tax rate in retirement is lower than today, Traditional usually wins. If it's higher, Roth usually wins. Nobody knows the future of US tax policy, so we default to the more defensive assumption — that rates rise from here.
About the default values
Comparison type defaults to Roth IRA vs Traditional 401k because this reflects the most common real-world decision — someone who has a Traditional 401k through their employer and is deciding whether to also contribute to a separate Roth IRA. Switch to Roth 401k vs Traditional 401k if your employer offers both Roth and Traditional options within the same 401k plan and you are deciding which tax treatment to use.
Account type defaults to 401k because it's the most common retirement vehicle for full-time employees in the US, and its higher contribution limit produces a more meaningful comparison. Switch to IRA if you're modeling an individual retirement account instead.
Monthly contribution defaults to $583 — the monthly equivalent of the 2026 Roth IRA annual contribution limit of $7,500 divided by 12, rounded to the nearest dollar. This starting point works as a meaningful comparison for both comparison types. In Roth IRA vs Traditional 401k mode the slider is capped at $625 per month — the maximum allowed by the Roth IRA annual limit of $7,500. In Roth 401k vs Traditional 401k mode the slider extends to $2,042 per month — the maximum allowed by the 401k annual limit of $24,500.
Filing status defaults to Single. Your filing status affects which federal tax bracket applies to your income — married filers generally have wider brackets at each rate, which can change your marginal rate and therefore the tool recommendation. If you are married and file jointly switch to Married for a more accurate calculation. Note that state income taxes are not included in this tool — residents of high-tax states should factor their combined federal and state rate into their retirement tax rate assumption.
Current annual income is set to $65,000 by default. That's close to the US median individual income for full-time workers and lands squarely in the 22% federal marginal bracket — the most common bracket faced by working professionals.
Years to retirement defaults to 39, matching a starting age of 26 and a retirement age of 65 — the same arc as Ethan and Cody in The Two Paths Saga. It's a long enough runway to let compounding meaningfully separate the two paths.
Expected annual return defaults to 7.0% — the historical real (after-inflation) return of the S&P 500 since 1926. Using a real return keeps the comparison expressed in today's dollars.
Expected retirement tax rate defaults to Higher than today. US federal income tax rates are historically low by long-run standards — the top marginal rate was above 70% for most of the mid-twentieth century. With persistent federal deficits and an aging population, the honest default assumption is that rates rise, not fall. You can switch to Similar or Lower if you have a specific reason to expect otherwise, but we'd rather show you the conservative answer first.