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IRA Calculator 2026 — Traditional vs. Roth (Side-by-Side Comparison)

Compare Traditional IRA vs. Roth IRA side-by-side with 2026 IRS contribution limits ($7,000 base, $8,000 age 50+). See the breakeven retirement tax rate, decision insight guidance, and tax-free vs. tax-deferred growth visualization.

✓ Formula verified: January 2026For informational purposes only

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IRA Calculator

Results update instantly as you type

Enter Values

Current Age*

years

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Target Retirement Age*

years

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Current IRA Balance (Total)Enter your combined Traditional + Roth IRA balance, or 0 if starting fresh.

Annual Contribution (2026 Limit: $7,000, +$1,000 if 50+)*2026 IRS combined limit: $7,000 (under 50), $8,000 (age 50+). Applies to Traditional + Roth combined.

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Expected Annual Return*Historical S&P 500 average: ~10% nominal, ~7% after inflation.

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Current Marginal Tax Rate*Your highest federal tax bracket. Used to calculate the Traditional IRA upfront tax deduction.

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Expected Effective Tax Rate in RetirementThe effective tax rate you expect to pay on Traditional IRA withdrawals in retirement. This is the key variable in the Roth vs. Traditional decision.

Roth IRA — Tax-Free Balance

$1.22M

↑ Gain

Traditional IRA — After 12% Withdrawal Tax$1.08M

Recommended: RothRoth wins by $146,785

Traditional IRA — Gross Balance (Before Tax)$1.22M

Roth IRA — Tax-Free Investment Growth$963,207

Breakeven Retirement Tax Rate

0.0%

Total Contributions (Current + Annual × Years)

$260,000

http://127.0.0.1:54963/finance/ira-calculator

Traditional IRA vs. Roth IRA — Side-by-Side

Roth IRA (After-Tax)

$1.22M

100% tax-free withdrawal

Traditional IRA (After-Tax)

$1.08M

After 12% withdrawal tax

Roth Wins By

$146,785

Tax-free growth advantage

Breakeven Retirement Tax Rate

12.0%

If your retirement rate is below this → Traditional wins

Balance Growth Over Time

Roth IRA (Tax-Free)

Traditional IRA (After 12% Tax)

Decision Insight

Your current marginal tax rate is 10% and you estimate 12% in retirement. Since you are in a lower bracket now than in retirement, a Roth IRA likely makes sense — pay 10% now, withdraw tax-free at 12%.

If your effective retirement tax rate is below 12.0%, Traditional wins. Above that, Roth wins. Estimate your retirement rate based on how much you plan to withdraw annually.

The Formula

Roth: FV = Balance × (1+r)^n + PMT[((1+r)^n − 1) / r] → tax-free | Traditional: Same FV × (1 − tax%)

Both account types grow identically. The only difference is when taxes are paid. Roth = pay tax now (contribution is after-tax), never again. Traditional = deduct now, pay tax on every dollar withdrawn at your future rate. If your tax rate is the same now and later, the result is mathematically identical.

Variable Definitions

Current vs. Future Tax Rate

Now vs. Retirement

If your current marginal rate is higher than your retirement effective rate, Traditional wins (deduct now at high rate, pay later at low rate). If lower now, Roth wins (pay now at low rate, withdraw tax-free later). The breakeven rate shown in results tells you the tipping point.

Breakeven Rate

The Decision Point

If your retirement effective rate is below this percentage, Traditional wins. Above it, Roth wins. Find your breakeven and compare against your estimated retirement rate.

Contribution Limit

2026 IRS Combined Limit

$7,000 (under 50) or $8,000 (50+) applies to the total of Traditional + Roth IRA contributions. You can split any way between the two types.

How to Use This Calculator

1
Enter your current age and target retirement age to set the investment window.
2
Enter your combined current IRA balance (Traditional + Roth) and planned annual contribution.
3
The calculator enforces the 2026 IRS limit of $7,000 (under 50) / $8,000 (50+).
4
Select your current marginal tax rate — this determines the Traditional IRA deduction benefit.
5
Estimate your effective tax rate in retirement — this is the critical variable. Most retirees have effective rates of 10–15%.
6
The breakeven rate shows the exact retirement tax rate at which Traditional and Roth are equal.

Common Applications

Compare the after-tax retirement value of a Traditional IRA versus a Roth IRA based on your current tax rate and estimated retirement tax rate.
Determine the breakeven retirement tax rate at which Traditional and Roth IRAs produce the same after-tax outcome.
Plan annual contributions across both IRA types to create tax diversification and optimize your retirement withdrawal strategy.

Roth IRA contributions are after-tax but all withdrawals are tax-free; Traditional IRA contributions are pre-tax (deductible) but all withdrawals are taxed as ordinary income

Understanding the Concept

The Traditional vs. Roth IRA decision comes down to one question: is your tax rate higher now or in retirement? If you pay $7,000/year into a Traditional IRA at a 22% marginal rate, you save $1,540 in taxes this year. That tax savings can be invested elsewhere. In retirement, every dollar withdrawn from the Traditional IRA is taxed as ordinary income. A Roth IRA skips the upfront deduction in exchange for completely tax-free withdrawals. The math is identical when current and future tax rates are the same — meaning the Roth advantage is purely a bet on future tax rates being higher. Most financial advisors suggest Roth for young professionals in low brackets, Traditional for peak earners in high brackets, and a mix for those who want tax diversification.

Frequently Asked Questions

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