Roth vs Traditional IRA Calculator 2026
Roth vs traditional IRA on equal pre-tax dollars for 2026 — balance at retirement for each, the invested tax saving, the break-even retirement tax rate and a verdict, with the $7,500 / $8,600 limits confirmed on irs.gov.
| 2026 contribution limit check | — |
|---|---|
| Current marginal rate | — |
| Roth: after-tax contribution that fits | — |
| Roth: balance at retirement (tax-free) | — |
| Traditional: balance at retirement | — |
| Traditional: after tax at the retirement rate | — |
| Traditional: tax saving invested outside (after drag) | — |
| Break-even retirement tax rate | — |
| Verdict | — |
In short
A traditional IRA deducts now and taxes withdrawals later; a Roth taxes now and withdraws tax-free. With equal tax rates now and in retirement — and the traditional tax saving invested — the two end close to equal, so the choice is a bet on your future rate: traditional if you are in a high bracket now, Roth if you are in a low one or want flexibility (no RMDs). The 2026 limit is $7,500, or $8,600 at age 50+.
Who this is for: US savers choosing where to put this year's IRA contribution.
Roth vs traditional: the one question that matters
- Traditional IRA: deduct now, pay tax on withdrawals later at whatever rate applies then. Best when today's bracket is higher than retirement's.
- Roth IRA: no deduction now, withdrawals tax-free. Best when today's bracket is lower — early career, a low-income year, or if you expect higher taxes later. No required minimum distributions, and contributions can be withdrawn at any time.
- Equal rates = equal result (if the traditional tax saving is invested and not spent). The decision is a bet on your future tax rate; splitting between the two hedges it.
- 2026 limit: $7,500 ($8,600 at 50+) across all IRAs; direct Roth contributions phase out at higher incomes (backdoor Roth is the workaround), and traditional deductibility phases out if a workplace plan covers you.
- Effective limit advantage: because the Roth limit is in after-tax dollars, a maxed Roth shelters more real money than a maxed traditional.
See also: 401(k) Contribution & Employer Match Calculator, RMD Calculator 2026 — Required Minimum Distribution.
Assumptions
- Both contributions capped at the 2026 limit; Roth contribution = pre-tax amount × (1 − current marginal rate).
- Traditional total = balance × (1 − retirement rate) + tax saving invested outside at return × (1 − drag); Roth total = balance, tax-free.
- Break-even rate = 1 − Roth ÷ (traditional balance + side account).
Worked example
Roth: $5,850 after tax a year → about $44,500 per year-of-contribution at 65 (single year shown for clarity). Traditional: $7,500 → $57,100, less 22% = $44,500, plus the $1,650 tax saving grown outside at 5.6% to about $8,400 → $52,900. With equal rates the traditional edges ahead only because of the invested saving; the break-even retirement rate is about 32.1% — above that the Roth wins. On these inputs the result is traditional by about $8,400 per contribution year.
Frequently asked questions
Roth or traditional IRA — which is better?
Traditional if your tax rate now is higher than it will be in retirement; Roth if it is lower or equal (for the flexibility). The calculator shows the break-even rate.
What is the IRA contribution limit for 2026?
$7,500, or $8,600 if you are 50 or older, across all traditional and Roth IRAs combined, and no more than your earned income.
Can I contribute to both?
Yes, as long as the combined total stays within the limit — a common hedge.
What is a backdoor Roth?
Contributing to a non-deductible traditional IRA and converting it to a Roth, used by people above the Roth income limits; watch the pro-rata rule if you hold other pre-tax IRA money.
Are there income limits for a Roth IRA in 2026?
Yes — direct contributions phase out at higher incomes (the ranges are set annually); above them, a backdoor Roth is the usual route.
Can I deduct a traditional IRA if I have a 401(k)?
Only below income phase-out ranges when you (or your spouse) are covered by a workplace plan; otherwise the contribution is non-deductible.
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