Roth vs. Traditional IRA Calculator
Choosing the right type of IRA can be a challenge. Are you better off with a traditional IRA, which helps you cut your current tax bill, or a Roth IRA, where you get to enjoy your earnings from the account tax-free? This Roth vs. Traditional IRA Calculator helps you compare the performance of both types of IRA based on your personal financial situation. It takes into account your age, income, expected rate of return, annual contributions, tax rates, the age at which you plan to retire and more to let you see which type is likely to provide you with the greatest financial benefits.
Financial Calculators from
Age, income and retirement information:
Press spacebar to hide inputs
Investment return, taxes, employment and marital status:
Totals At Retirement
press spacebar to hide graph
press spacebar to show graph
Your current age.
The amount you will contribute to an IRA each year. This calculator assumes that you make your contribution at the beginning of each year. For 2019 the maximum annual IRA contribution of $6,000 is an increase of $500 from 2018. It is important to note that this is the maximum total contributed to all of your IRA accounts. The contribution limit increases with inflation in $500 increments. An annual change to the contribution limit only occurs if the cumulative effect of inflation since the last adjustment is $500 or more.
If you are 50 or older you can make an additional 'catch-up' contribution of $1,000. The 'catch-up' contribution amount of $1,000 remains unchanged for 2019. In order to qualify for the 'catch-up' contribution, you must turn 50 by the end of the year in which you are making the contribution.
You can no longer make contributions to a traditional IRA in the year you reach 70 1/2.
Roth IRA contributions are limited for higher incomes. If your income falls in a 'phase-out' range you are allowed only a prorated Roth IRA contribution. If your income exceeds the phase-out range, you do not qualify for any Roth IRA contribution. The table below summarizes the income 'phase-out' ranges for Roth IRAs.
|Tax Filing Status||Income Phase-Out Range|
|Married filing jointly or head of household||$193,000 to $203,000|
|Single||$122,000 - $137,000|
|Married filing separately||$0 - $10,000|
For the purposes of this calculator, we assume you are not "Married filing separately" and contributing to a Roth IRA.
Starting in 2010 high income individuals have the option to make non-deductible traditional IRA contributions and then immediately convert them to a Roth IRA. This can effectively eliminate the income phase-out for Roth IRA contributions. This option for Roth IRA contributions may or may not be available in later years depending on future changes to the IRA law. This calculator assumes that you will not be taking advantage of this option.
Expected rate of return
The annual rate of return for your IRA. This calculator assumes that your return is compounded annually and your contributions are made at the beginning of each year. The actual rate of return is largely dependent on the types of investments you select. The Standard & Poor's 500® (S&P 500®) for the 10 years ending December 31st 2018, had an annual compounded rate of return of 12.1%, including reinvestment of dividends. From January 1, 1970 to December 31st 2018, the average annual compounded rate of return for the S&P 500®, including reinvestment of dividends, was approximately 10.2% (source: www.standardandpoors.com). Since 1970, the highest 12-month return was 61% (June 1982 through June 1983). The lowest 12-month return was -43% (March 2008 to March 2009). Savings accounts at a financial institution may pay as little as 0.25% or less but carry significantly lower risk of loss of principal balances.
It is important to remember that these scenarios are hypothetical and that future rates of return can't be predicted with certainty and that investments that pay higher rates of return are generally subject to higher risk and volatility. The actual rate of return on investments can vary widely over time, especially for long-term investments. This includes the potential loss of principal on your investment. It is not possible to invest directly in an index and the compounded rate of return noted above does not reflect sales charges and other fees that investment funds and/or investment companies may charge.
Age at retirement
Age you wish to retire. This calculator assumes that the year you retire, you do not make any contributions to your IRA. So if you retire at age 65, your last contribution occurs when you are actually 64.
Current tax rate
The current marginal income tax rate you expect to pay on your taxable investments.
Retirement tax rate
The marginal tax rate you expect to pay on your investments at retirement.
Adjusted gross income
Your adjusted gross income from your tax return. This is used to determine whether or not your annual contributions might be tax deductible.
Check the box if you are married. This is used to determine whether or not your annual contributions are tax deductible.
For the purposes of this calculator, we assume you are not "Married filing separately".
Check the box if you have an employer-sponsored retirement plan, such as a 401(k) or pension. This is used to determine whether or not your annual contributions might be tax deductible.
Check this box if you plan to contribute the maximum amount allowed to your account each year. This includes the additional catch-up contribution available when you are age 50 or over.
Total non-deductible contributions
The total of your traditional IRA contributions that were made without a tax deduction. Traditional IRA contributions are often tax deductible. However, if you have an employer-sponsored retirement plan at work, such as a 401(k), your tax deduction is limited based on your income. This calculator automatically determines if your tax deduction is limited by your income.
|Tax Filing Status||Income Phase-Out Range|
|Married filing jointly||$103,000 - $123,000|
|Single, Head of Household or Married Filing Separately (and have not lived with spouse for last year)*||$64,000 - $74,000|
|Married filing separately*||$0 - $10,000|
|Married filing jointly (spouse has employer plan, IRA owner does not)**||$193,000 - $203,000|
The total amount contributed to your IRA.
IRA total after taxes
For the Roth IRA, this is the total value of the account. For the traditional IRA, this is the sum of two parts: 1) The value of the account after you pay income taxes on all earnings and tax deductible contributions and 2) additional earnings from the re-invested tax savings.
Please note that for distributions to include earnings that are tax free the Roth IRA must be opened for 5 tax years. Eligible tax free distributions include those taken for death or disability, after age 59-1/2, or for a first time home purchase.
Please consult with a tax professional regarding IRA eligibility, tax deductions and your specific situation.
Roth vs. Traditional IRA Calculator Overview
An IRA is a great investment tool to help prepare for retirement. Regardless of what type you get – a Roth or a traditional IRA – it gives you tax benefits that put more money into your pocket. However, there's a big difference in when you realize those tax benefits – and depending on your tax bracket, that will affect which is the better choice for you.
With a traditional IRA, most investor's contributions are made with pre-tax dollars. That is, the money you invest in your IRA are deducted from your earnings for the year, so you don't pay income taxes on it. Likewise, your investment returns in the IRA grow tax-free as well. However, the money you eventually draw out of the IRA when you're retired is taxed as regular income.
With a Roth IRA, you don't get a tax deduction for your contributions to the account – those are post-tax dollars. However, the money you invest still grows tax-free, and the distributions you take in retirement are untaxed as well. So it comes down to a question of taking your tax break now or later.
The question of which is the better choice often comes down to tax rates. If you're in a higher tax bracket now than you expect to be in during retirement, a traditional IRA may be the better option, since your contributions now give you a bigger break than your disbursements would in retirement. But if you expect to stay in the same bracket or a higher one, it may be better to take the Roth and enjoy tax-free income when you retire.
Both the Roth and traditional IRA have limits on how much you can contribute each year. This limit was $5,500 in 2016 and is indexed to inflation in $500 increments. Those age 50 and over can contribute an additional $1,000 in "catch-up" funds.
Tax-deductible contributions to a traditional IRA and allowed contributions to a Roth IRA are phased out at higher income levels. Special limits for both apply to married couples filing separately. Also, your contributions to a traditional IRA may be limited if you also participate in an employer-sponsored retirement plan like a 401(k) or 403(b).
Using the Roth vs. Traditional IRA Calculator
Enter the requested information in the appropriate areas. For a more detailed explanation of each, click on the heading of any box. Clicking on the "Annual contribution" box heading will provide detailed information on contribution limits.
Check "maximize contributions" if you wish to contribute the current maximum allowed per year, plus the additional $1,000 per year for those age 50 and above. Note that you can no longer make contributions to a traditional IRA after age 70½.
Checking the "married" or "employer contribution" boxes may affect the amount you can contribute per year.
The calculator will show which option will produce the larger account balance upon retirement. To see the impact of investing your annual tax savings and the taxes on your distributions with a traditional IRA, click "View report." That will provide a detailed rundown of both options and a fuller analysis of the financial benefits of each, based on your situation.
Other Mortgage and Financial Calculators
In addition to the standard mortgage calculator, this page lets you access more than 100 other financial calculators covering a broad variety of situations. Choose from calculators covering various aspects of mortgages, auto loans, investments, student loans, taxes, retirement planning and more.
- Adjustable Rate Mortgage Calculator
- Interest Only ARM Calculator Overview
- How much can I borrow?
- Mortgage comparison: 15 years vs 30 years
- Balloon Loan Calculator
- ARM vs. Fixed-Rate Mortgage Calculator
- APR Calculator for Adjustable Rate Mortgages
- Bi-weekly Payment Calculator
- Blended Rate Mortgage Calculator
- Fixed Rate Mortgage vs. Interest Only ARM calculator
- Mortgage Tax Savings Calculator
- Rent vs. Buy Calculator
- Mortgage Payoff Calculator
- Mortgage Required Income Calculator
- Interest-Only Mortgage Calculator
- Mortgage Qualifying Calculator
- Mortgage Calculator Simple (PITI) - Mortgage Calculation
- Mortgage APR Calculator
- Bi-Weekly Payment Calculator For an Existing Mortgage
- Enhanced Loan Calculator
- Existing Loan Calculator
- Mortgage Debt Consolidation Calculator
- Mortgage Points Break-Even Calculator
- Refinance Break-Even Calculator
- Refinance Calculator
- Auto Rebate vs. Low Interest Financing
- Bi-weekly Payments for an Auto Loan Calculator
- Dealer Financing vs. Credit Union Financing Calculator
- Auto Lease vs. Auto Buy Calculator
- Home Equity vs. Auto Loan Calculator
- Auto Loan Calculator
- Bi-weekly Payments for an Auto Loan Calculator
- Auto Loan Payoff Calculator
- Retirement Income Calculator
- 401(k) Net Unrealized Appreciation Calculator
- 401(k) Savings Calculator
- 403(b) Savings Calculator
- 457 Savings Calculator
- 72(t) Distribution Impact Calculator
- Beneficiary Required Minimum Distributions
- Pension Plan Retirement Options
- Retirement Contribution Effects Calculator
- Retirement Planner
- Roth vs. Traditional IRA Calculator
- 72(t) Distribution Options Calculator
- Social Security Benefits Calculator