Roth vs Traditional 401(k) Calculator
Roth: pay tax now, never again. Traditional: deduct now, pay later. This compares the after-tax spendable value of each for the same pre-tax cost — and shows the breakeven retirement tax rate that decides it. US-specific.
After-tax spendable value
It's a wash — both leave you about $717,902 to spend.
Breakeven retirement tax rate: 24% — if your retirement rate lands above this, Roth wins; below it, Traditional wins. It equals your current rate: that's the whole bet.
What's not in this math
- Employer match — always pre-tax (traditional), even in a Roth 401(k). Free money either way; contribute enough to capture it before optimizing.
- Required minimum distributions (RMDs) on traditional balances starting in your 70s.
- State taxes and early-withdrawal penalties.
- Contribution limits and income phase-outs (Roth IRA eligibility phases out at higher incomes).
Common questions
What is the breakeven retirement tax rate?
The retirement tax rate at which Roth and Traditional come out exactly equal — and it is simply your current marginal rate. If you will pay a higher rate in retirement than today, Roth wins; lower, Traditional wins. The whole decision is a bet on your future tax rate versus today's.
Is the employer match Roth or traditional?
Employer matching contributions are always pre-tax (traditional), even inside a Roth 401(k) — you will owe tax on the match and its growth when you withdraw it. The match is free money either way: contribute enough to capture the full match before optimizing Roth vs traditional.
What if I don't know my retirement tax rate?
Most retirees land in a lower bracket — no paycheck means less income. But large traditional balances plus Social Security and required minimum distributions can push it back up. Try a few scenarios in the calculator; if the answer flips only at extreme rates, the choice matters less than contributing consistently.