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Roth vs Traditional

Compare · 2026

Roth vs Traditional

Roth IRA vs Traditional IRA: $708,455.90 vs $615,152.26 after-tax nest egg. Roth IRA models about $708,455.90 after-tax nest egg vs $615,152.26 — about $93,303.64 more. Traditional year-1 tax savings ≈ $1,650.00 (Roth $0).

Higher after-tax nest egg

Roth IRA models more after-tax nest egg

$708,455.90 vs $615,152.26, a $93,303.64 difference. Year-1 boost gap ≈ $1,650.00.

Side-by-side scoreboard

Roth

$708,455.90

after-tax nest egg · Roth · rank #1

Year-1 boost
$0.00
Balance
$708,455.90
Roth profile →

Traditional

$615,152.26

after-tax nest egg · Trad · rank #2

Year-1 boost
$1,650.00
Balance
$708,455.90
Traditional profile →

Year-1 tax savings

Traditional IRA wins cash-flow

Traditional deduction raises year-1 tax savings; Roth does not cut AGI on this model.

Key takeaways

  • Roth IRA models about $708,455.90 after-tax nest egg vs $615,152.26 — about $93,303.64 more. Traditional year-1 tax savings ≈ $1,650.00 (Roth $0).
  • If future withdrawal tax ≈ today’s effective income-tax rate on equal contributions, Roth keeps more nest egg; Traditional wins year-1 tax savings (cash edge after the same contribution).
  • Tax now: the contribution does not reduce taxable income this year, so year-1 tax savings vs a no-contribution baseline are $0 (AGI unchanged).
  • Tax later: the deduction creates year-1 tax savings vs a no-contribution baseline (and vs Roth after the same contribution); future withdrawals are taxed.
  • Tax-free later: the modeled nest egg at retirement is the full account balance (qualified withdrawal assumption).
  • After-tax nest egg applies today’s effective income-tax rate on the headline salary baseline as a stand-in for future withdrawal tax — not a prediction of future brackets.

How to read Roth vs Traditional

Both paths contribute $7,500/yr from age 35 to 65 at 7% with a $0 start. Year-1 tax uses a $100,000 single salary in TX for 2026.

Roth IRA leads after-tax nest egg by about $93,303.64; Traditional leads year-1 cash-flow because of the deduction.

Tax now vs tax later

Roth: pay income tax on earnings used to contribute; qualified withdrawals are generally tax-free.

Traditional: deductible contributions can create year-1 tax savings; withdrawals are generally taxed as ordinary income.

Equal contribution dollars into the account do not mean equal after-tax wealth when one path still owes tax on withdrawal.

After-tax nest egg stand-in

Traditional after-tax nest egg = balance × (1 − today’s effective income-tax rate on the $100,000 baseline, income tax only — FICA excluded from the rate).

That rate is a stand-in for future withdrawal tax, not a prediction. RMDs, pro-rata rules, and backdoor strategies are excluded.

Two scoreboards, one vignette

Nest-egg gap ≈ $93,303.64 favoring Roth; year-1 tax-savings gap ≈ $1,650.00 favoring Traditional.

Neither scoreboard alone answers every household — cash-flow today and spendable nest egg later trade off.

Caveats

Eligibility, income phase-outs, employer plans, and state treatment of retirement income vary — personalize in the linked calculators.

This hub is education, not tax or investment advice.

Official rules behind this compare

Contribution ladder — nest-egg gaps

Contribution / yrRothTraditionalGap
$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

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.

Decision framework (education, not advice)

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.

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.

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.

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.

Worked examples (engine-locked)

Shared balance at retirement

$708,455.90

  1. Contribute $7,500/yr for 30 years at 7%.
  2. 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

  1. Roth nest egg = full balance (tax paid on contribution dollars already).
  2. ≈ $708,455.90.

Qualified withdrawal assumption

Traditional after-tax nest egg

$615,152.26

  1. Apply 13.17% to the shared balance.
  2. ≈ $615,152.26.

Today’s effective income-tax rate stand-in

After-tax nest-egg gap

$93,303.64

  1. Roth ≈ $708,455.90; Traditional ≈ $615,152.26.
  2. 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

  1. Baseline: $100,000 single TX, no contribution.
  2. 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

  1. 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

  1. Roth nest egg ≈ $472,303.93; Traditional ≈ $410,101.50.
  2. Traditional year-1 tax savings at this rung ≈ $1,100.00; Roth remains $0.

Same ages and return; contribution scaled on the ladder

How to use this compare

  1. Scan the nest-egg scoreboard. Compare after-tax nest egg first — Roth vs Traditional on the locked vignette.
  2. 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.
  3. Read the stand-in disclosure. Today’s effective income-tax rate is not a forecast of future brackets.
  4. Walk the contribution ladder. See how nest egg and year-1 tax savings scale with annual contributions.
  5. Use the decision framework. Match your situation to the educational “leans Roth / leans Traditional” signals — not a personalized recommendation.
  6. Note common mistakes. Avoid confusing equal contributions with equal after-tax wealth, or treating the stand-in rate as a prophecy.
  7. Personalize. Run exact ages, returns, and salary in the Roth IRA and US paycheck calculators.

Who this compare 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.

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.

Exclusions

  • 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)

FAQ

Roth IRA by about $93,303.64 ($708,455.90 vs $615,152.26).

Traditional IRA by about $1,650.00 (Traditional tax savings ≈ $1,650.00; Roth $0).

Yes — both use $7,500/yr, age 35→65, 7% return, starting balance $0. Pre-tax vs after-tax treatment is applied after growth.

No. Traditional after-tax nest egg applies today’s effective income-tax rate on the $100,000 baseline as a stand-in — not a forecast of future brackets. RMDs, pro-rata, and backdoor strategies are not modeled.

Related tools

Roth IRA calculatorContribution limits and growth projection.US paycheck calculatorModel deductible contributions and take-home.401(k) & IRA limits by yearAnnual contribution ceilings for workplace and IRA accounts.Retirement taxes by stateHow states treat Social Security and retirement income.Social Security claim age62 vs FRA vs 70 lifetime and breakeven compare.Roth vs Traditional 401(k) paycheckWorkplace plan tax timing on your paycheck.

Related

HubRothTraditionalRoth IRA calculator

Switch paths

Compare Roth vs Traditional

Same contribution path — nest egg vs year-1 cash-flow.

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).

By Sammy S. · Founder · AuthorUpdated for 2026