401(k) vs Roth IRA Calculator

A traditional 401(k) and a Roth IRA are taxed at opposite ends of the timeline — traditional contributions go in pre-tax and are taxed as ordinary income when you withdraw them in retirement, while Roth contributions go in after-tax and come out completely tax-free, including all the growth. This calculator compares the after-tax value both paths produce at retirement, using the same pool of pre-tax dollars you have available to save, and accounts for the two things that make this comparison more than a simple tax-rate guess: the very different contribution limits ($24,500 for a 401(k) vs $7,500 for a Roth IRA in 2026) and the Roth IRA's income-based eligibility phase-out, which a 401(k) doesn't have.

The core mathematical insight is this: if your tax rate is exactly the same now and in retirement, and both accounts could hold your full contribution, traditional and Roth produce identical after-tax results — because tax is paid on the same underlying dollars either way, it's just a question of when. The two paths only diverge when your tax rate changes between now and retirement, or when contribution limits or income eligibility force a different amount into each account type.

For the related decision of how a 401(k) contribution affects your paycheck today, see the Take-Home Pay After Benefits Calculator, and for whether you're capturing your full employer match before optimizing traditional vs Roth, see the 401(k) Match vs Salary Calculator.

The traditional 401(k) path invests the full pre-tax amount (up to the 401(k) limit) and only pays tax once, at withdrawal, at your assumed retirement tax rate. The Roth IRA path pays tax on the pre-tax amount immediately at your current rate, and only the after-tax remainder — capped separately at the (much lower) Roth IRA limit — gets invested, but grows completely tax-free from that point on. Both use the same future-value-of-an-ordinary-annuity growth factor, treating contributions as a level annual amount compounding at your expected return.

The Roth IRA contribution limit itself shrinks as your Modified AGI moves through the 2026 phase-out range ($153,000–$168,000 Single/Head of Household, $242,000–$252,000 Married Filing Jointly) — the reduced limit is calculated proportionally within that range, rounded up to the nearest $10, with a $200 minimum if you're anywhere inside the range at all. Above the top of the range, direct Roth IRA contributions aren't allowed.

The two future-value figures are both already after-tax — they're directly comparable as spendable retirement dollars, not raw account balances. The account type showing the higher figure produces more real, spendable money in retirement under your specific assumptions about current versus future tax rates and how much fits within each account's contribution limit.

Because a Roth IRA's contribution limit is much lower than a 401(k)'s, someone saving more than about $7,500 a year (or $8,600 with catch-up) can't put it all into a Roth IRA regardless of tax-rate assumptions — in practice, many people use a Roth 401(k) (offered by some employers, with the same higher limit as a traditional 401(k)) to get Roth tax treatment at 401(k)-sized contribution amounts, which this calculator doesn't model directly.