Compare after-tax retirement balances. The right choice depends on your tax bracket now versus in retirement.
After-tax retirement balance at age 65
Roth: You contribute after-tax dollars. The full contribution grows tax-free, and withdrawals in retirement are completely tax-free. Your cost is paying taxes now on the contribution amount at your current marginal rate.
Traditional: You contribute pre-tax dollars, which lowers your taxable income today. The money grows tax-deferred, but you pay income tax on the full withdrawal amount in retirement. This calculator also accounts for investing the upfront tax savings you get from the Traditional deduction, since that's real money you can put to work.
The key variable is whether your tax rate is higher now or in retirement. If higher now → Traditional wins. If higher in retirement → Roth wins. This is a simplified model — actual results depend on your full tax picture, state taxes in retirement, RMDs, Social Security, and other factors.