Higher nest egg
$708,455.90
Roth IRA
🇺🇸
United States · 2026 · IRAs
Roth vs Traditional IRA
Same $7,500/yr · age 35→65 · 7% — Roth after-tax nest egg $708,455.90 vs Traditional $615,152.26 (≈ $93,303.64 gap). Traditional year-1 tax savings $1,650.00; Roth $0. Tax now vs tax later.
By Sammy S. · Founder · AuthorUpdated for 2026
Nest-egg gap
$93,303.64
Roth ahead of Traditional
Year-1 Trad tax savings
$1,650.00
Roth year-1 tax savings $0
Key finding — Roth ≈ $93,303.64 more after-tax nest egg
On $7,500/yr · age 35→65 · 7% (2026 · TX), Roth models about $708,455.90 after-tax nest egg vs Traditional ≈ $615,152.26 (gap ≈ $93,303.64). Traditional year-1 tax savings ≈ $1,650.00; Roth $0.
Paycheck Tax Calculator Roth vs Traditional 2026. Updated 2026-08-10. Vignette: $7,500/yr · age 35→65 · 7% return · $100,000 single salary for year-1 tax · TX · 2026.
Key takeaways
- Roth after-tax nest egg ≈ $708,455.90; Traditional ≈ $615,152.26 (gap ≈ $93,303.64) on the headline vignette.
- Account balance at retirement ≈ $708,455.90 on both paths (same contribution and return).
- Year-1 Traditional tax savings ≈ $1,650.00 on $100,000 single TX; Roth year-1 tax savings $0.
- Today’s effective income-tax rate on the $100,000 TX baseline ≈ 13.17% (income tax only; used as Traditional withdrawal stand-in).
- Same salary and contribution in California: Traditional year-1 tax savings ≈ $2,347.50 — larger than TX because state income tax amplifies the deduction.
- If future rate ≈ today’s rate on equal contributions, Roth keeps more nest egg; Traditional wins year-1 tax savings (more cash left after funding the same contribution).
- Contribution limits, MAGI eligibility, and RMDs are summarized from IRS Pub 590-A / 590-B — this hub does not run phase-out or RMD math.
- Not advice — see IRS Roth/Traditional IRA publications and personalize in the linked calculators.
Why people compare Roth vs Traditional
The choice is usually tax now vs tax later on the same contribution budget — not different market returns.
This hub locks both paths to 2026 engines already used on the Roth IRA calculator and US paycheck calculator.
Savers often ask whether today’s deduction is worth giving up tax-free withdrawals later. Ranking both scoreboards on one vignette makes that trade-off concrete.
How to read this hub
Headline vignette: $7,500/yr · age 35→65 · 7% return · $100,000 single salary for year-1 tax · TX · 2026.
Roth after-tax nest egg ≈ $708,455.90; Traditional ≈ $615,152.26 (gap ≈ $93,303.64).
Primary ranking sorts by after-tax nest egg descending. Year-1 Traditional tax savings is a second scoreboard.
Path profiles, the compare corridor, and the contribution ladder all reuse the same engines — figures should match across pages.
Tax now vs tax later
Roth: contribute after-tax dollars; no year-1 AGI reduction on this model; qualified withdrawals tax-free.
Traditional: deductible contribution models ≈ $1,650.00 of year-1 tax savings on the TX vignette (cash edge vs Roth after the same contribution); withdrawals taxed later.
Paying tax earlier (Roth) or later (Traditional) changes when cash leaves your paycheck — and how much of the ending balance is still taxable.
Nest-egg math
Both paths compound $7,500/yr for 30 years at 7% from $0 → balance ≈ $708,455.90.
Traditional after-tax nest egg applies 13.17% (today’s income-tax effective rate on $100,000 TX) as a withdrawal stand-in.
That stand-in is why Roth’s after-tax nest egg leads by about $93,303.64 even though balances match.
Equal contributions isolate tax timing
This hub forces the same annual contribution into both accounts so market return and savings rate cancel out of the comparison.
Some households instead ask “equal take-home after funding” — that would put different dollars into each account and is a different experiment (not this vignette).
If you can only afford one contribution budget, the equal-contribution framing matches how many people actually choose an IRA type.
Why state income tax changes year-1 Traditional math
Headline state is TX (no state income tax on wages in this model). Traditional year-1 tax savings ≈ $1,650.00.
Same $100,000 single salary and $7,500 deductible contribution in California: ≈ $2,347.50 — state tax amplifies the deduction.
Roth year-1 tax savings stays $0 in both states on this model because AGI is unchanged. Nest-egg ranking still uses the TX stand-in rate unless you personalize.
How to use the decision framework
The framework below lists educational signals that often lean Roth or Traditional — not a recommendation and not a substitute for IRS eligibility tests.
If cash-flow today is the binding constraint, year-1 Traditional tax savings can matter more than the nest-egg gap on this vignette.
If you expect higher taxable income in retirement — or want less taxable RMD pressure later — Roth’s tax-free withdrawals (under qualified rules) get more weight.
What this hub excludes
Income phase-outs, backdoor Roth, pro-rata rules, RMDs, employer matches, and California as the headline state (see FAQ and state-contrast section for a CA year-1 figure).
Use the linked calculators for custom ages, returns, and salary.
Official rules this hub follows
Summarised from IRS Publications 590-A and 590-B and Topic 451. Amounts are calculated from our paycheck and Roth IRA engines (same engines as the linked calculators).
IRA contributions
- Roth and Traditional IRA contribution limits and eligibility
- $7,500 under-50 limit for 2026 (confirm annually with IRS)
- $1,100 catch-up for age 50+ in 2026 (not used on the headline vignette)
- Deductibility of Traditional contributions can depend on income and workplace coverage
IRS Publication 590-A — Contributions to Individual Retirement Arrangements →
IRA distributions
- Qualified Roth distributions generally tax-free
- Traditional distributions generally taxed as ordinary income
- Early-distribution and RMD rules can apply — not modeled here
IRS Publication 590-B — Distributions from Individual Retirement Arrangements →
IRA overview
- Overview of Traditional and Roth IRAs
- Contribution and deduction basics
- Links to forms and publications
IRS Topic No. 451 — Individual Retirement Arrangements (IRAs) →
After-tax nest egg by path
Ranked by after-tax nest egg descending. Highest: Roth IRA · lowest: Traditional IRA.
| # | Path | After-tax nest egg |
|---|---|---|
| 1 | Roth IRARoth | $708,455.90 |
| 2 | Traditional IRATrad | $615,152.26 |
Year-1 tax savings scoreboard
Traditional wins year-1 cash-flow after equal contributions on the $100,000 single TX vignette; Roth has no year-1 AGI cut (tax savings $0).
Roth IRA
$0.00
tax savings vs no-contribution baseline (cash edge vs Roth after same contribution)
Traditional IRA
$1,650.00
tax savings vs no-contribution baseline (cash edge vs Roth after same contribution)
Path profiles
Headline corridor
Compare the two paths
Compare Roth vs Traditional
Same contribution path — nest egg vs year-1 cash-flow.
Contribution ladder
Same ages and return at each rung. Amounts: $3,000 · $5,000 · $6,500 · $7,500.
| Contribution / yr | Roth nest egg | Trad nest egg | Gap |
|---|---|---|---|
| $3,000 | $283,382.36 | $246,060.90 | $37,321.46 |
| $5,000 | $472,303.93 | $410,101.50 | $62,202.43 |
| $6,500 | $613,995.11 | $533,131.95 | $80,863.16 |
| $7,500 | $708,455.90 | $615,152.26 | $93,303.64 |
Worked examples (engine-locked)
Shared balance at retirement
$708,455.90
- Contribute $7,500/yr for 30 years at 7%.
- Balance ≈ $708,455.90 (contributions $225,000.00; growth $483,455.90).
Same engine as the Roth IRA calculator
Roth after-tax nest egg
$708,455.90
- Roth nest egg = full balance (tax paid on contribution dollars already).
- ≈ $708,455.90.
Qualified withdrawal assumption
Traditional after-tax nest egg
$615,152.26
- Apply 13.17% to the shared balance.
- ≈ $615,152.26.
Today’s effective income-tax rate stand-in
After-tax nest-egg gap
$93,303.64
- Roth ≈ $708,455.90; Traditional ≈ $615,152.26.
- Gap ≈ $93,303.64 favoring Roth on equal contributions.
Roth nest egg − Traditional nest egg on the headline vignette
Year-1 Traditional tax savings (TX)
$1,650.00
- Baseline: $100,000 single TX, no contribution.
- With $7,500 deductible contribution, tax savings ≈ $1,650.00.
Same engine as the US paycheck calculator
Year-1 Traditional tax savings (CA contrast)
$2,347.50
- Same salary and contribution in California: tax savings ≈ $2,347.50 — larger than TX because state income tax amplifies the deduction.
Same engines · CA state income tax
Ladder rung — $5,000/yr
$62,202.43
- Roth nest egg ≈ $472,303.93; Traditional ≈ $410,101.50.
- Traditional year-1 tax savings at this rung ≈ $1,100.00; Roth remains $0.
Same ages and return; contribution scaled on the ladder
Concepts
Equal contribution, different tax timing
Same dollars into the account each year; Roth pays tax up front, Traditional defers it.
Nest egg vs cash-flow scoreboards
Primary rank is after-tax nest egg; year-1 Traditional tax savings is a second lens for current cash-flow after equal contributions.
Stand-in rate, not a forecast
Today’s effective income-tax rate on $100,000 stands in for future Traditional withdrawal tax.
State income tax matters year-one
A deductible contribution can save more in CA than in TX because state tax amplifies the deduction.
Balance ≠ spendable nest egg
Shared pre-withdrawal balance can hide a large after-tax gap once Traditional withdrawals are taxed.
Eligibility is separate from vignette math
You can understand the tax-timing trade-off here and still need Pub 590-A for MAGI and workplace-coverage tests.
Decision framework (education, not advice)
Educational signals that often lean Roth or Traditional on equal contributions — confirm eligibility with IRS Pub 590-A before treating any signal as your case.
Leans Roth
Leans Roth — higher expected future rates
If you expect to be in a higher tax situation in retirement than today, paying tax on contribution dollars now can look more attractive so qualified withdrawals stay tax-free.
Leans Roth
Leans Roth — tax-free withdrawals / fewer taxable RMDs
On this vignette Roth’s after-tax nest egg leads (≈ $708,455.90). Roth IRAs generally avoid lifetime RMDs for the original owner — a qualitative plus not quantified here.
Leans Traditional
Leans Traditional — year-1 cash-flow is binding
If funding $7,500 is tight, Traditional’s modeled year-1 tax savings (≈ $1,650.00 in TX; ≈ $2,347.50 in CA) leaves more spendable cash after the same contribution.
Leans Traditional
Leans Traditional — lower expected future rates
If you expect lower taxable income in retirement than today, the deduction now may outweigh tax-free withdrawals later — still verify eligibility and use today’s stand-in only as a teaching tool.
Either / both
Often either / both — diversify tax buckets
Many households hold both Roth and Traditional (or workplace equivalents) so future tax outcomes are not all-or-nothing. This hub compares pure paths on one vignette.
Either / both
Check eligibility before preferring a path
MAGI phase-outs and workplace coverage can force a different choice than the scoreboard alone suggests — confirm with IRS Pub 590-A.
Myths vs facts
“Roth and Traditional end with the same after-tax money if rates never change.”
On equal dollar contributions, Roth’s nest egg is after-tax dollars growing tax-free, while Traditional’s balance is pre-withdrawal. Applying today’s 13.17% stand-in, Roth ≈ $708,455.90 vs Traditional ≈ $615,152.26.
“Roth always saves tax in year one.”
Roth contributions are after-tax — year-1 tax savings is $0 vs a no-contribution baseline on this hub.
“Traditional never helps cash-flow.”
On $100,000 single TX, a $7,500 deductible contribution models about $1,650.00 more in year-1 tax savings (cash edge vs Roth after funding the same contribution).
“This predicts my future tax bracket.”
No — Traditional after-tax nest egg uses today’s effective income-tax rate as a stand-in only. Future brackets, RMDs, and other rules can change the result.
“California and Texas look the same for Traditional.”
State income tax can make the Traditional deduction worth more year-one in CA (≈ $2,347.50) than in TX (≈ $1,650.00) on this salary and contribution.
“A higher account balance always means a better path.”
Both paths share the same modeled balance (≈ $708,455.90). The useful compare is after-tax nest egg and year-1 cash-flow, not the pre-tax balance alone.
“I can ignore eligibility and just pick Roth or Traditional.”
MAGI phase-outs, workplace plan coverage, and filing status can limit Roth contributions or Traditional deductibility — confirm with IRS Pub 590-A before treating this vignette as your case.
Common mistakes
Treating shared balance as the winner
Both paths share ≈ $708,455.90 at retirement on the vignette. Compare after-tax nest egg and year-1 tax savings instead.
Assuming Roth cuts this year’s tax bill
Roth contributions are after-tax — year-1 tax savings vs a no-contribution baseline is $0 on this model.
Using the stand-in rate as a forecast
Today’s effective income-tax rate teaches the Traditional withdrawal haircut; it is not a prediction of your future bracket.
Ignoring state income tax on year-1 Traditional math
TX and CA can diverge materially on deductible-contribution tax savings even with the same salary and contribution.
Skipping eligibility and phase-outs
Scoreboards assume the contribution is allowed and (for Traditional) deductible — real MAGI tests may differ.
Mixing equal-contribution with equal-net experiments
Putting the same dollars into each IRA is not the same as equalizing take-home after funding. This hub only does the first.
Glossary
- Roth IRA
- After-tax contributions; qualified withdrawals are generally tax-free (IRS Pub 590-A / 590-B).
- Traditional IRA
- Often deductible contributions that reduce AGI today; withdrawals generally taxed as ordinary income.
- Year-1 tax savings
- Lower income tax from a deductible Traditional contribution vs the same salary with no contribution (FICA unchanged). After funding the same IRA contribution, Traditional leaves about that much more spendable cash than Roth.
- After-tax nest egg
- Roth: full balance. Traditional: balance reduced by today’s effective income-tax rate stand-in for future withdrawal tax.
- Effective income-tax rate (stand-in)
- Federal + state income tax on the $100,000 baseline ÷ salary — FICA excluded from this rate.
- Contribution limit (under 50)
- $7,500 for 2026 Roth/Traditional IRA under age 50 (IRS; from the same limit table as the Roth IRA calculator).
- Catch-up contribution (50+)
- Extra $1,100 for 2026 when age 50+ (IRS limit table). This hub’s vignette uses the under-50 limit only.
- Qualified withdrawal
- Generally age 59½+ and a 5-year clock for Roth — details in IRS Pub 590-B; this hub assumes qualified treatment for the Roth nest egg.
- AGI
- Adjusted gross income — the starting point for many IRA deduction and eligibility tests. Deductible Traditional contributions can lower AGI.
- MAGI
- Modified AGI used for Roth contribution eligibility and Traditional deductibility tests. Phase-out ranges are published by the IRS and are not modeled on this hub.
- RMD
- Required minimum distribution — Traditional IRAs generally require lifetime RMDs; Roth IRAs generally do not during the original owner’s life. Not modeled here.
- Equal-contribution vignette
- Both paths put the same $7,500 into the account each year — isolating tax timing, not different savings rates.
How to use this hub
- Scan the nest-egg scoreboard. Compare after-tax nest egg first — Roth vs Traditional on the locked vignette.
- Check year-1 cash-flow. Traditional’s tax savings vs Roth’s $0 year-1 AGI cut — after the same contribution, Traditional leaves that much more cash.
- Read the stand-in disclosure. Today’s effective income-tax rate is not a forecast of future brackets.
- Walk the contribution ladder. See how nest egg and year-1 tax savings scale with annual contributions.
- Use the decision framework. Match your situation to the educational “leans Roth / leans Traditional” signals — not a personalized recommendation.
- Note common mistakes. Avoid confusing equal contributions with equal after-tax wealth, or treating the stand-in rate as a prophecy.
- Personalize. Run exact ages, returns, and salary in the Roth IRA and US paycheck calculators.
Who this hub helps
Earners choosing IRA type
See nest-egg vs year-1 cash-flow on equal contributions before opening an account.
High current tax states
Traditional’s year-1 tax savings can be larger where state income tax applies — compare TX vs CA in the FAQ and state-contrast section.
Long-horizon savers
Same 7% growth path for 30 years — isolate tax timing, not market skill.
Cash-flow-constrained households
If funding the IRA squeezes the monthly budget, year-1 Traditional tax savings is the scoreboard to weigh carefully.
Educators & advisers
Engine-locked corridor with IRS Pub 590-A / 590-B sources.
Workplace + IRA savers
Similar tax-timing logic appears in Roth vs Traditional 401(k) — see the related blog after you understand the IRA vignette.
Planning notes (education, not advice)
Match the account to expected rates
If you expect higher rates later, Roth’s tax-free withdrawals can matter more; if lower, Traditional’s deduction may look better — this hub does not predict your path.
Watch eligibility and phase-outs
Income limits and workplace coverage can change deductibility or Roth contribution room.
Employer plans are separate
401(k) Roth vs Traditional can follow similar tax-timing logic but different limits — see the blog if you contribute at work.
Revisit when income or state changes
A raise, a move to a high-tax state, or retirement relocation can flip which scoreboard matters most.
Coordinate with Social Security and RMDs
Taxable Traditional withdrawals can interact with other retirement income; this hub excludes those interactions.
This is education, not advice
IRS pages and this hub do not replace a tax or financial professional.
What we exclude
- Income phase-outs and MAGI eligibility tests
- Backdoor Roth and pro-rata / aggregation rules
- Required minimum distributions (RMDs)
- Employer matches and 401(k)-only limits
- California as the headline state (year-1 CA contrast in FAQ and prose)
- Investment fees, sequence-of-returns risk, and Social Security taxation interactions
- Spousal IRA rules, conversions, and recharacterizations
- Catch-up contributions (vignette uses under-50 limit only)
Validation notes
- Shared balance at retirement ≈ $708,455.90.
- Roth after-tax nest egg ≈ $708,455.90; Traditional ≈ $615,152.26.
- TX year-1 Traditional tax savings ≈ $1,650.00; CA ≈ $2,347.50.
- Effective income-tax rate stand-in (TX) ≈ 13.17%.
- Figures are calculated from our paycheck and Roth IRA engines (same engines as the linked calculators).
Frequently asked questions
Two IRA paths on the same $7,500/yr contribution from age 35→65 at 7% (2026 · TX), plus year-1 tax on a $100,000 single salary.
Roth ≈ $708,455.90 vs Traditional ≈ $615,152.26 (about $93,303.64 more for Roth on this vignette).
Traditional by about $1,650.00 on the TX vignette; Roth year-1 tax savings is $0 (after-tax contribution).
Roth contributions are after-tax — they do not reduce AGI, so year-1 tax savings vs a no-contribution baseline are $0. After funding the IRA, Roth still leaves less spendable cash than Traditional by the Traditional tax-savings amount.
Shared balance × (1 − today’s effective income-tax rate on the $100,000 TX baseline, income tax only). Rate ≈ 13.17%. Not a prediction of future brackets.
Yes on this vignette — about $708,455.90 — because contributions and return match. The after-tax nest egg still differs once Traditional withdrawal tax is applied.
No. RMDs, pro-rata/aggregation, and backdoor strategies are not modeled on this hub.
IRS 2026 catch-up is $1,100 on top of the under-50 limit. This hub’s vignette uses the under-50 limit only; personalize in the Roth IRA calculator if you are 50+.
Headline uses TX (no state income tax). Same $100,000 single 2026 engines in California: Traditional year-1 tax savings ≈ $2,347.50 vs TX ≈ $1,650.00 — CA state income tax makes the Traditional deduction worth more. Roth year-1 tax savings remains $0 in both states on this model.
No — it is an educational checklist of signals that often lean Roth or Traditional. Confirm eligibility with IRS Pub 590-A and a qualified professional.
No — educational comparison only. Confirm rules with IRS Pub 590-A / 590-B and a qualified professional.
Roth growth: /roth-ira-calculator. Paycheck / deduction: /calculator/us. Retirement income by state: /retirement-taxes-by-state. Workplace Roth vs Traditional: /blog/roth-vs-traditional-401k-paycheck.
Related tools
Roth IRA calculator
Contribution limits and growth projection.
US paycheck calculator
Model deductible contributions and take-home.
401(k) & IRA limits by year
Annual contribution ceilings for workplace and IRA accounts.
Retirement taxes by state
How states treat Social Security and retirement income.
Social Security claim age
62 vs FRA vs 70 lifetime and breakeven compare.
Roth vs Traditional 401(k) paycheck
Workplace plan tax timing on your paycheck.
Prefer custom ages or returns? Open the Roth IRA calculator.
By Sammy S. · Founder · AuthorUpdated for 2026