Compare Traditional and Roth 401(k) outcomes.
Pre-tax (Traditional)
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After retirement tax.
Roth
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Tax-free withdrawal.
Better choice
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Your breakdown
Updates live as you type| Step | Traditional | Roth |
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The apples-to-apples problem this fixes
The Traditional versus Roth 401(k) debate gets muddled because people compare unequal contributions. A pre-tax dollar and a Roth dollar are not the same: the pre-tax dollar still owes income tax someday, and the Roth dollar has already paid it. This calculator handles that honestly. It assumes you commit the same pre-tax outlay to either account, then funds the Roth with what is left after current-year tax. That is the only fair way to read the result, and it is the assumption that drives every number below.
For 2026, the 401(k) elective deferral limit is $24,500, with an $8,000 standard catch-up at age 50 and a higher $11,250 catch-up at ages 60–63. Whether you direct those dollars to the pre-tax or Roth side is the choice this tool helps you make. The contribution ceiling is shared; what changes is when the tax is paid.
A 30-year run at a 32% / 22% rate gap
Use the defaults: $20,000 a year for 30 years at a 7 percent return, a 32 percent marginal rate today, and an expected 22 percent rate in retirement. The Traditional side invests the full $20,000 because no tax is taken first. The Roth side, funded with the same $20,000 of pre-tax income, invests only $13,600 after the 32 percent bite. Both grow at the same rate as a level annual contribution.
Traditional wins here for one reason: you expect to pay a lower rate later than you save today. Deferring tax at 32 percent and paying it at 22 percent is a 10-point arbitrage on every dollar, and over 30 years of compounding that edge grows to almost $188,922.
Where the tie actually sits
If your current and retirement marginal rates are identical, Traditional and Roth produce the same after-tax dollars, period. The math is symmetric: paying tax now or later on the same growth lands in exactly the same place. Set both rate fields to 24 percent and you will see the two columns converge. The break-even is simply the point where today's rate equals tomorrow's rate. Above that line Roth wins, below it Traditional wins.
This is why young earners in a 12 or 22 percent bracket usually favor Roth: they have decades for the account to grow and a strong chance their retirement rate, or future statutory rates, will be higher. Peak earners in the 32 or 35 percent bracket who expect a quieter retirement usually favor pre-tax. The tool turns that intuition into dollars for your specific numbers.
The retirement rate is a guess, so stress-test it
The single most uncertain input is your future tax rate, and it is worth stress-testing. Tax law can change over a multi-decade saving horizon, while your retirement income, required minimum distributions from pre-tax accounts, Social Security taxation, and state of residence all affect the rate actually paid. A retiree who relocates from California to a no-income-tax state may lower the retirement rate, tilting the comparison toward Traditional.
My practical advice to clients is rarely all-or-nothing. Splitting contributions builds both a pre-tax and a tax-free bucket, which gives you a lever in retirement: in a high-income year you draw from Roth to control your bracket, and in a low-income year you pull from Traditional cheaply. The calculator's job is to show you which way the base case leans, not to force a single account.
Does the employer match change the answer?
Employer matching contributions are traditionally pre-tax, even when your own deferrals are Roth. SECURE 2.0 allows a plan to offer fully vested Roth matching or nonelective contributions, but the plan document must permit that treatment and the employee generally recognizes the designated amount as income. Check the plan terms. This calculator compares only your elective deferrals.
Are Roth 401(k) withdrawals always tax-free?
Qualified Roth 401(k) withdrawals are tax-free once you are 59 and a half and the account has met the five-year holding rule. Note that Roth 401(k)s historically carried required minimum distributions, but beginning in 2024 the SECURE 2.0 Act eliminated RMDs from Roth 401(k)s during the owner's lifetime, putting them on par with Roth IRAs. That removes one of the old reasons savers rolled Roth 401(k) money out to an IRA.