MCPCalc

Roth vs Traditional IRA Calculator

Compare Roth and Traditional IRA outcomes based on current and retirement tax rates.

Scratchpad (not saved)

$

Annual IRA contribution (2024 max: $7,000; $8,000 if 50+)

years

Years until retirement

%

Expected annual investment return

%

Your current marginal tax rate

%

Expected tax rate in retirement

What This Calculator Does

Compare after-tax retirement outcomes between Roth and Traditional contribution strategies under different tax assumptions.

It combines Annual Contribution, Years to Retirement, Expected Annual Return, Current Tax Rate to estimate Better Option, Traditional Pre-Tax Balance, Traditional After-Tax Value.

Formula & Method

Core equations: Both account types grow with annual contributions: B_t = (B_{t-1} + C) \times (1 + r) Traditional after-tax value at retirement: V_{trad} = B_T \times (1 - r_{ret}) Roth after-tax value: V_{roth} = B_T (no withdrawal tax). The better option depends on whether r_{current} < r_{retirement}. Inputs are applied in base units, then derived metrics are computed from the same equations and rounded for display.

Notation used in the formulas: R = Better Option; x_{1} = Annual Contribution; x_{2} = Years to Retirement; x_{3} = Expected Annual Return; x_{4} = Current Tax Rate; x_{5} = Retirement Tax Rate.

Method summary: inputs are normalized to consistent units, core equations are evaluated, then secondary values are derived and rounded for display.

Use this when planning annual retirement contributions and evaluating whether tax treatment now or later is more favorable.

Inputs Used

  • Annual Contribution: Annual IRA contribution (2024 max: $7,000; $8,000 if 50+)
  • Years to Retirement: Years until retirement
  • Expected Annual Return: Expected annual investment return
  • Current Tax Rate: Your current marginal tax rate
  • Retirement Tax Rate: Expected tax rate in retirement

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