Should I choose Roth or Traditional 401(k)?

The single most-important variable is your CURRENT marginal tax bracket vs your EXPECTED RETIREMENT bracket. If you'll be in a higher bracket in retirement (high earner now in low-tax state, planning to retire in high-tax state, or expecting income to climb), Roth wins. If you'll be in a lower bracket in retirement (most retirees drop 1-2 brackets), Traditional usually wins — but only if you actually reinvest the deduction's tax savings. The breakeven retirement bracket the calculator surfaces is the actual decision pivot.

Why does most online advice say 'always Roth'?

Two reasons. (1) Account-only comparisons (which most calculators run) ignore that the Traditional contributor has a current-year tax deduction worth real dollars — if reinvested, the Traditional path often wins. (2) Roth has the marketing tailwind: tax-free growth feels concrete; tax savings invested separately requires discipline most people don't have. The calculator's apples-to-apples mode gives you the disciplined-investor answer; the account-only mode gives you the lazy-investor answer (which often leans Roth by default).

What's the breakeven retirement tax rate?

It's the retirement bracket at which Roth and Traditional produce identical spendable wealth at retirement, holding all other inputs constant. Computed by solving: account_FV × (1 − retTax) + taxable_after_LTCG = account_FV. Simplifies to retTax_breakeven = taxable_after_LTCG / account_FV. The number you see in the result depends mostly on your CURRENT bracket and the LTCG rate. Higher current bracket + lower LTCG → lower breakeven (Roth more often wins).

What if I can't realistically reinvest the tax savings?

Then switch the calculator to account-only mode. In that scenario, the answer collapses to 'whichever bracket is higher loses' — Roth wins if currentTax retirementTax. For people without the discipline to invest the tax savings, the account-only comparison is actually more accurate to their real-world outcome. Be honest with yourself.

What about Roth 401(k) vs Roth IRA?

Both are Roth (post-tax in, tax-free out), so the math here applies to both equally. Differences: 401(k) has higher contribution limits ($23,000 vs $7,000 in 2026), no income phase-out, and offers employer match (always pre-tax — separate Traditional bucket). IRA gives you broader investment choice and typically lower fees. For most people: max the Roth 401(k) match first, then prioritize between Roth IRA (more flexibility) and additional Roth 401(k) (higher limits).

What about employer match?

Employer matches are always pre-tax (they go into a Traditional bucket regardless of which side you contribute to). For comparison purposes, ignore the match — it's the same in both paths. Always max the match first, then come back to this calculator for the marginal-dollar Roth-vs-Traditional decision on YOUR contributions.

What return should I assume?

For a long-horizon (20+ year) all-equity 401(k), 7% real / 10% nominal is the long-run S&P average. The calculator uses nominal rates throughout. For mixed portfolios (60/40 stocks/bonds), use 5-6% nominal. Be honest — the case for Roth versus Traditional is often closer than the chart suggests; over-estimating return amplifies whichever vehicle is winning at your inputs in a way that won't hold up in reality. If the answer flips when you drop return from 8% to 5%, the call wasn't robust.

How does inflation affect the comparison?

Both vehicles deal with the same nominal dollars, so inflation cancels out of the ratio comparison — a $100 difference today and a $100 difference 30 years from now both have the same real ratio. The only inflation gotcha is if your ASSUMED retirement bracket doesn't shift to where future-you actually lands — most people use today's brackets, but tax law changes. The calculator uses fixed nominal rates; if you want a stress test, set retirement tax rate 5pp higher than your honest guess to see if Roth still wins.

What if tax rates change in the future?

TCJA-era brackets (in effect through 2025) are scheduled to revert to higher pre-2018 levels in 2026 unless extended. This is the strongest argument for Roth among tax-policy hawks: paying tax NOW at known low rates locks in current law, while Traditional defers into uncertain future rates. Roth-leaning planners assume 'rates will be higher than today' as the planning prior. The calculator lets you set retirement bracket to whatever future-state you assume; toggle 28-32% to see how the answer flips.

What about RMDs (Required Minimum Distributions)?

Traditional 401(k) requires RMDs starting at age 73 (rising to 75 in 2033). Roth 401(k) had RMDs until SECURE 2.0 eliminated them in 2024 — Roth 401(k) and Roth IRA are now both RMD-free. RMDs force taxable withdrawals at retirement-bracket rate even if you don't need the cash. For high-net-worth retirees, this is a non-trivial tilt toward Roth — the calculator doesn't model RMDs explicitly, but the scenario panel's bracket sensitivity captures the effect (high retirement bracket = Roth wins).

Should I do a Roth conversion?

A Roth conversion is moving Traditional → Roth in a single year, paying ordinary income tax on the converted amount that year. The same breakeven math applies: convert when your current effective rate is below your expected retirement rate. Most useful in 'gap years' (early retirement before SS/RMD income kicks in, sabbaticals, low-income years). The calculator doesn't model conversions directly, but the breakeven retirement bracket it surfaces is exactly the rate above which conversion makes sense.

Can I save scenarios at different retirement brackets?

Yes — click Save to store your inputs as a named scenario. Useful for stress-testing: save one at conservative retirement bracket (12%), one at base (22%), one at aggressive (32%). The scenario panel below the verdict shows wealth at all 7 standard US brackets simultaneously, which is usually faster than saving multiple scenarios.

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Roth vs Traditional 401(k) Calculator — With Breakeven Bracket Math

Apples-to-apples Roth vs Traditional comparison that models the tax-deduction savings invested separately, surfaces the breakeven retirement bracket, and stops pretending the answer is obvious.

Instant result
Private — nothing saved
Works on any device
AI insight included

Reviewed by CalcBold EditorialLast verified May 4, 2026Methodology

Currency

Used for display only — math is currency-agnostic.

Annual contribution

2026 401(k) limit is $23,000 (under 50). Use what you'd realistically contribute.

Years to retirement

How many years until you stop contributing & start withdrawing.

Expected return

Long-run S&P average ≈ 7% real, 10% nominal. Use 6-7% for honest planning.

Current marginal tax rate

Federal + state marginal bracket on your last dollar of income today.

Expected retirement tax rate

Your projected marginal bracket in retirement. Most retirees drop 1-2 brackets.

Capital-gains tax (taxable side)

Long-term cap-gains tax applied to the Trad side's reinvested tax savings. 0% if held in another tax-advantaged wrapper.

Comparison method

Apples-to-apples models the disciplined Trad investor reinvesting the deduction. Account-only is the simpler comparison most online tools use — biased toward Roth.

Bracket sensitivity

Adjust any input. The grid shows after-tax wealth under both vehicles at every US marginal bracket — useful when you're uncertain about your retirement bracket. The breakeven row is where Roth and Traditional tie.

Annual contributionYears to retirementExpected return (%)Current tax rate (%)LTCG rate (%)MethodCurrency

Account FV (both)

$2,172,598

Trad tax-savings side

$468,050

Reinvested deduction at 24% × LTCG 15%

Breakeven retirement bracket

21.5%

Above → Roth wins · Below → Traditional wins

After-tax wealth by retirement bracketApples-to-apples mode

Retirement bracket	Roth (tax-free)	Traditional	Δ	Winner
10%	$2,172,598	$2,423,388	−$250,790	Traditional
12%	$2,172,598	$2,379,936	−$207,338	Traditional
22%⟵ breakeven	$2,172,598	$2,162,677	+$9,922	Roth
24%	$2,172,598	$2,119,225	+$53,374	Roth
32%	$2,172,598	$1,945,417	+$227,181	Roth
35%	$2,172,598	$1,880,239	+$292,359	Roth
37%	$2,172,598	$1,836,787	+$335,811	Roth

The Roth column is constant — Roth wealth doesn't depend on your retirement bracket because withdrawals are tax-free. Each row varies only in the Traditional column (account taxed at that retirement bracket). The breakeven row is the rate at which Trad’s account-after-tax plus the reinvested-deduction taxable side equals the Roth value.

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What This Calculator Does

The Roth vs Traditional 401(k) calculator answers the marginal-dollar retirement question every disciplined investor faces: “After my employer match is maxed, should the next $X/year go into a Roth account (post-tax in, tax-free out) or a Traditional account (pre-tax in, taxed at retirement)?” Most online tools answer this with vague heuristics — “if you’ll be in a higher bracket later, choose Roth.” That’s correct directionally but useless quantitatively. The calculator does the math properly: apples-to-apples comparison with the Traditional contributor’s tax deduction reinvested in a taxable brokerage, surfaces the breakeven retirement bracket, and stops pretending the answer is obvious.

Both paths grow the same nominal dollar in the 401(k) at the same return; the only differences are when tax is paid (now vs at retirement) and what bracket applies (current marginal vs retirement marginal). The right answer depends critically on which bracket is higher — and on whether the Traditional contributor actually invests the deduction’s tax savings.

The Math: Apples-to-Apples vs Account-Only

The disciplined-investor framing is critical: when you contribute to a Traditional 401(k), you get a tax deduction THIS YEAR worth contribution × current marginal rate. If you simply spend that tax savings (most people do), Traditional collapses to the “account-only” comparison — and at that point the question simplifies to “will my retirement bracket be lower than my current bracket?” If yes, Trad wins; if no, Roth.

But disciplined investors REINVEST the tax savings in a taxable brokerage at the same expected return. That side account grows tax-deferred (mostly) and gets taxed at long-term capital gains at retirement. Modeled honestly, this side account often closes most of the gap that the simple comparison shows in Roth’s favour. The breakeven retirement bracket the calculator surfaces is the rate at which the two paths produce identical spendable wealth.

A Worked Example — “$23K/yr, 30 years, 24% now → 22% in retirement”

Suppose you contribute $23,000/year for 30 years at 7% expected return. Current marginal bracket 24%. Projected retirement bracket 22%. LTCG 15%.

FV factor (annuity, 7%, 30 yr) = 94.46.
Account FV (both vehicles): $23,000 × 94.46 = $2.17M.
Roth final wealth: $2.17M (tax-free).
Traditional account after 22% retirement tax: $2.17M × 0.78 = $1.69M.
Annual tax savings on Traditional: $23,000 × 24% = $5,520/yr.
Tax savings invested in taxable: $5,520 × 94.46 = $521K. Gains $521K − $166K = $355K. After 15% LTCG: $468K.
Traditional total spendable: $1.69M + $468K = $2.16M.
Wealth delta: $10K for Roth over 30 years.
Breakeven retirement bracket: 21.6% — your 22% retirement bracket is just barely above breakeven.

At these inputs, the two vehicles are essentially tied — the Roth edge is <0.5% of the final pot. Most online “Roth slam-dunk” comparisons hide the tax-savings reinvestment completely; once you model it properly, the answer is rarely as one-sided as the simple comparison shows.

Now bump your projected retirement bracket to 32% (you expect future tax rates to be higher than today’s, or you’ll retire to a high-tax state). Same inputs:

Trad account after 32% tax: $2.17M × 0.68 = $1.48M.
Tax-savings side stays at $468K(deduction didn’t change).
Trad total: $1.95M.
Δ: $220K for Roth — that’s a slam-dunk.

When Roth Wins, When Traditional Wins

Roth wins clearly

Retirement bracket > current bracket. Most common scenarios: high earners now in low-tax state retiring to a high-tax state, mid-career with rising income trajectory, early-career professionals expecting bracket creep over the horizon, anyone planning to retire to a higher-tax country.
You assume future tax rates rise. TCJA-era brackets revert in 2026 unless extended; a 24% bracket today could be a 28% bracket in retirement under prior law. Roth locks in the known current rate.
You won’t reinvest the deduction.If Traditional’s tax savings would just get spent, the honest comparison is account-only — and at that point Roth almost always wins unless retirement bracket is dramatically lower than current.
RMD avoidance matters.Roth 401(k) and Roth IRA both have NO required minimum distributions (post-SECURE 2.0). Traditional forces taxable withdrawals starting age 73 even if you don’t need the cash. For high-net-worth retirees, this tilts toward Roth.

Traditional wins clearly

Retirement bracket < current bracket BY A WIDE MARGIN (typically 5pp+) AND you actually invest the tax savings. High earners in their peak years (32-37% bracket) planning to retire on lower income (12-22% bracket) often see Traditional win by 6 figures over a 30-year horizon.
You qualify for tax-friendly retirement state. Florida, Texas, Tennessee, Wyoming, Washington (no state income tax) — retiring there from California or New York shaves significantly off your retirement marginal rate.
Backdoor Roth alternatives exist.If you’re in the 32%+ bracket today, doing Traditional first and potentially converting in lower-income gap years (sabbatical, early retirement before SS kicks in) gives you control over when you pay tax.

Genuinely close — split or default Roth

Current and retirement brackets within 2-3pp of each other. Sensitivity to LTCG rate, return assumption, and reinvestment discipline dominates the answer. Most planners recommend a 50/50 split between Roth and Traditional contributions in this range — captures both tax-bracket scenarios, avoids single-point-of-failure planning.
You can’t honestly predict your retirement bracket. The calc’s breakeven row tells you what bracket you need to hit for one path to win; if you can’t commit to a number, default to Roth (locks in known rates) or split.

Reading the Bracket-Sensitivity Panel

Below the verdict, the panel shows after-tax wealth at every US marginal bracket (10%, 12%, 22%, 24%, 32%, 35%, 37%) using your chosen contribution, horizon, return, and current bracket. Three things to watch:

The breakeven row.The bracket at which Roth and Trad tie. If your retirement bracket guess is comfortably above this row, Roth is robust; comfortably below, Traditional. If you’re within ±2pp of the breakeven, the call is fragile and tax-diversification (50/50 split) is the safe default.
Roth column is constant.Tax-free withdrawals mean retirement bracket doesn’t affect Roth wealth. The variation across rows is purely Traditional’s tax burden. This makes Roth the “regret-free” option when you’re uncertain — its outcome is bracket-independent.
Method toggle changes everything. Switch from apples-to-apples to account-only and watch the breakeven collapse to your current bracket. The gap between those two breakevens is the dollar value of disciplined deduction reinvestment — typically 5-15% of total wealth at typical inputs.

Common Mistakes (and How to Avoid Them)

Confusing average rate with marginal rate. The Roth-vs-Trad math uses your MARGINAL rate (the bracket your last dollar of income falls in), not your effective average rate. They can differ by 5-10pp. Use the Tax Bracket Calculator to find your honest marginal — most people guess wrong and use their average rate, which biases toward Traditional.
Forgetting the employer match is always pre-tax. Match contributions go into a Traditional bucket regardless of which side you contribute to. So you already have Traditional exposure from the match — picking Roth for your contributions is automatically a 50/50-ish split for most people, which is a feature, not a bug.
Assuming retirement bracket = current bracket. Most retirees drop 1-2 brackets (lower income, no mortgage, no dependents, often a tax-friendlier state). High earners in the 37% bracket planning to retire on $80K of expenses are likely looking at a 22% retirement bracket — that’s a 15-percentage-point swing toward Traditional.
Not reinvesting the Trad deduction.If you can’t commit to investing the tax savings each year, the comparison collapses to account-only and Trad loses most of its edge. Set up an automatic taxable-brokerage transfer the same week you contribute, or honestly pick Roth.
Treating tax law as static.TCJA brackets sunset at end of 2025 absent congressional action. State tax rates change. ACA premium subsidies and IRMAA Medicare surcharges are sensitive to retirement income. Long-horizon calcs assume a stable framework that won’t hold for 30 years. Use the bracket-sensitivity panel to stress-test — if the answer flips at retirement bracket ±5pp, you needed to know that.
Optimizing instead of diversifying. When the two vehicles are within 5% of each other on after-tax wealth, the optimization gain is dominated by your assumption error. Tax-diversification (50/50 split) is professional-investor standard practice — it lets you adjust withdrawal mix in retirement based on actual brackets, not assumed ones.

How to Use the Save / Share / Print Actions

Click Savebelow the verdict to store the scenario in your browser (up to 5). Useful for naming variations: “Conservative — 22% retirement,” “Aggressive retirement bracket — 32%,” “Account-only sanity check.” Click Share to copy a URL with your inputs encoded — useful for sending to a partner or advisor for a second opinion. Click Print for a clean 1-page summary.

How This Differs From Other Calculators

The Retirement Savings Calculator models the absolute trajectory — “will I have enough?” — independent of vehicle choice. Use it after picking Roth or Traditional. The Compound Interest Calculator stress-tests the long-horizon trajectory at varied return rates. The Tax Bracket Calculator gives you the per-slice marginal-rate view you need to find your TRUE current bracket (most people guess wrong). All three are complementary — this calculator answers the vehicle-choice question; the others answer the projection and tax-input questions that feed into it.

Related Tools

Compound Interest Calculator — long-horizon trajectory of contributions at variable returns.
Retirement Savings Calculator — “will I have enough?” sizing using your chosen vehicle.
Tax Bracket Calculator — find your honest marginal rate, the most-important Roth/Trad input.
Pay-Off Mortgage vs Invest Calculator — for the next-tier decision: extra mortgage payments vs taxable brokerage.

Frequently Asked Questions

The most common questions we get about this calculator — each answer is kept under 60 words so you can scan.

Should I choose Roth or Traditional 401(k)?
The single most-important variable is your CURRENT marginal tax bracket vs your EXPECTED RETIREMENT bracket. If you'll be in a higher bracket in retirement (high earner now in low-tax state, planning to retire in high-tax state, or expecting income to climb), Roth wins. If you'll be in a lower bracket in retirement (most retirees drop 1-2 brackets), Traditional usually wins — but only if you actually reinvest the deduction's tax savings. The breakeven retirement bracket the calculator surfaces is the actual decision pivot.
Why does most online advice say 'always Roth'?
Two reasons. (1) Account-only comparisons (which most calculators run) ignore that the Traditional contributor has a current-year tax deduction worth real dollars — if reinvested, the Traditional path often wins. (2) Roth has the marketing tailwind: tax-free growth feels concrete; tax savings invested separately requires discipline most people don't have. The calculator's apples-to-apples mode gives you the disciplined-investor answer; the account-only mode gives you the lazy-investor answer (which often leans Roth by default).
What's the breakeven retirement tax rate?
It's the retirement bracket at which Roth and Traditional produce identical spendable wealth at retirement, holding all other inputs constant. Computed by solving: account_FV × (1 − retTax) + taxable_after_LTCG = account_FV. Simplifies to retTax_breakeven = taxable_after_LTCG / account_FV. The number you see in the result depends mostly on your CURRENT bracket and the LTCG rate. Higher current bracket + lower LTCG → lower breakeven (Roth more often wins).
What if I can't realistically reinvest the tax savings?
Then switch the calculator to account-only mode. In that scenario, the answer collapses to 'whichever bracket is higher loses' — Roth wins if currentTax < retirementTax, Traditional wins if currentTax > retirementTax. For people without the discipline to invest the tax savings, the account-only comparison is actually more accurate to their real-world outcome. Be honest with yourself.
What about Roth 401(k) vs Roth IRA?
Both are Roth (post-tax in, tax-free out), so the math here applies to both equally. Differences: 401(k) has higher contribution limits ($23,000 vs $7,000 in 2026), no income phase-out, and offers employer match (always pre-tax — separate Traditional bucket). IRA gives you broader investment choice and typically lower fees. For most people: max the Roth 401(k) match first, then prioritize between Roth IRA (more flexibility) and additional Roth 401(k) (higher limits).
What about employer match?
Employer matches are always pre-tax (they go into a Traditional bucket regardless of which side you contribute to). For comparison purposes, ignore the match — it's the same in both paths. Always max the match first, then come back to this calculator for the marginal-dollar Roth-vs-Traditional decision on YOUR contributions.
What return should I assume?
For a long-horizon (20+ year) all-equity 401(k), 7% real / 10% nominal is the long-run S&P average. The calculator uses nominal rates throughout. For mixed portfolios (60/40 stocks/bonds), use 5-6% nominal. Be honest — the case for Roth versus Traditional is often closer than the chart suggests; over-estimating return amplifies whichever vehicle is winning at your inputs in a way that won't hold up in reality. If the answer flips when you drop return from 8% to 5%, the call wasn't robust.
How does inflation affect the comparison?
Both vehicles deal with the same nominal dollars, so inflation cancels out of the ratio comparison — a $100 difference today and a $100 difference 30 years from now both have the same real ratio. The only inflation gotcha is if your ASSUMED retirement bracket doesn't shift to where future-you actually lands — most people use today's brackets, but tax law changes. The calculator uses fixed nominal rates; if you want a stress test, set retirement tax rate 5pp higher than your honest guess to see if Roth still wins.
What if tax rates change in the future?
TCJA-era brackets (in effect through 2025) are scheduled to revert to higher pre-2018 levels in 2026 unless extended. This is the strongest argument for Roth among tax-policy hawks: paying tax NOW at known low rates locks in current law, while Traditional defers into uncertain future rates. Roth-leaning planners assume 'rates will be higher than today' as the planning prior. The calculator lets you set retirement bracket to whatever future-state you assume; toggle 28-32% to see how the answer flips.
What about RMDs (Required Minimum Distributions)?
Traditional 401(k) requires RMDs starting at age 73 (rising to 75 in 2033). Roth 401(k) had RMDs until SECURE 2.0 eliminated them in 2024 — Roth 401(k) and Roth IRA are now both RMD-free. RMDs force taxable withdrawals at retirement-bracket rate even if you don't need the cash. For high-net-worth retirees, this is a non-trivial tilt toward Roth — the calculator doesn't model RMDs explicitly, but the scenario panel's bracket sensitivity captures the effect (high retirement bracket = Roth wins).
Should I do a Roth conversion?
A Roth conversion is moving Traditional → Roth in a single year, paying ordinary income tax on the converted amount that year. The same breakeven math applies: convert when your current effective rate is below your expected retirement rate. Most useful in 'gap years' (early retirement before SS/RMD income kicks in, sabbaticals, low-income years). The calculator doesn't model conversions directly, but the breakeven retirement bracket it surfaces is exactly the rate above which conversion makes sense.
Can I save scenarios at different retirement brackets?
Yes — click Save to store your inputs as a named scenario. Useful for stress-testing: save one at conservative retirement bracket (12%), one at base (22%), one at aggressive (32%). The scenario panel below the verdict shows wealth at all 7 standard US brackets simultaneously, which is usually faster than saving multiple scenarios.