Roth vs Traditional 401k Calculator
Enter your annual contribution, your tax bracket now, your expected bracket in retirement and the years to grow. The calculator compounds both paths at 7% and shows the final after-tax value of each - Roth grows tax-free, Traditional deducts now and taxes at the end.
Most comparison pages bury the punchline: with identical growth, the entire verdict collapses to whether your tax rate is higher today or in retirement. This one shows the math collapsing to exactly that - and then says honestly that nobody knows their retirement rate, which is why split contributions are the rational default.
How to use
- Set the contribution you can actually sustain every year.
- Pick your bracket from your pay stub; pick the retirement bracket honestly.
- Watch the gap change as the retirement-rate guess moves - that is the real lesson.
Frequently asked questions
Which is better, Roth or Traditional 401k?
Whichever comes with the lower tax rate: contribute and deduct at a high rate now (Traditional) or pay tax now and withdraw tax-free later (Roth). If the rates were identical they would tie exactly - every dollar of difference in the calculator comes from the rate gap.
Should young investors choose Roth?
Usually yes - early-career brackets are the lowest of a working life, so buying tax-free growth at a 12% rate and withdrawing at 22%+ is a good trade. The calculator shows the same logic quantified: low rate now, Roth wins.
Does the employer match count for Roth?
By default employer match lands pre-tax (Traditional side) regardless of your election, though plans increasingly allow Roth match. Either way the match itself is a 50-100% instant return - never leave it, whatever the flavor.
Can I split between Roth and Traditional?
Yes, in the same plan, in the same year - and it is the honest strategy when the future rate is unknown. Splitting builds tax diversification: withdrawals can be balanced across taxable, Traditional and Roth buckets in retirement.