Roth or Traditional IRA - which is better?

It depends mostly on whether you expect your tax rate to be higher or lower in retirement than it is today. Roth wins when retirement tax rates are higher; Traditional wins when retirement tax rates are lower.

Are Roth withdrawals really tax-free?

Qualified Roth IRA withdrawals are federal income tax-free, including investment growth.

Does Traditional IRA tax savings change the comparison?

Yes. If up-front tax savings from a Traditional contribution are reinvested in a taxable account, the Traditional path can become more competitive.

Roth vs. Traditional IRA

Resource Center · Calculator

Roth vs. Traditional IRA

Practical financial planning, tax planning, retirement, and investing insights from the My 360 Wealth Management team.

Your inputs

Compare projected after-tax balances for Roth and Traditional IRA contributions.

Current age

yrs

Retirement age

yrs

Annual contribution

Expected annual return (%)

Current marginal tax rate (%)

Tax rate in retirement (%)

After-tax results at retirement

Roth IRA—

Traditional IRA—

Difference—

Assumes the same gross annual contribution.

For illustration only. Does not model contribution limits, eligibility phase-outs, RMDs, or alternative use of tax savings.

About the Roth vs. Traditional IRA Comparison

The Roth vs. Traditional decision often comes down to one question: do you expect to be in a higher or lower tax bracket in retirement than you are today?

When Roth typically wins

You expect higher tax rates in retirement than you have today
You are early in your career with rising income
You want tax-free withdrawals to manage Medicare premium tiers (IRMAA)
You want to leave tax-free assets to heirs

When Traditional typically wins

You expect lower tax rates in retirement
You are in your peak earning years and the up-front deduction matters now
You plan to live in a state with no income tax during retirement

What this calculator does not model

IRS contribution limits and income-based eligibility phase-outs
Required Minimum Distributions starting at age 73 for Traditional IRAs
Reinvestment of Traditional tax savings into a taxable account

Get a personalized recommendation

My 360 Wealth Management Group advisors can model the Roth vs. Traditional decision alongside your full tax picture.

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Information and interactive calculators are made available to you as self-help tools for your independent use and are not intended to provide investment, tax, or legal advice. We cannot and do not guarantee their applicability or accuracy in regards to your individual circumstances. All examples are hypothetical and are for illustrative purposes. We encourage you to seek personalized advice from qualified professionals regarding all personal finance issues.