The core question: tax now or tax later?
With a traditional IRA or 401(k), you get a deduction now and pay tax when you withdraw. With a Roth, you pay tax now and qualified withdrawals are tax-free. If your tax rate is the same both times, they come out even. The account that wins is the one that lets you pay tax at the lower rate.
A fair comparison
A $7,500 traditional contribution and a $7,500 Roth contribution don't cost the same: the traditional one saves tax today. This calculator compares a traditional contribution with a smaller Roth contribution that has the same effect on your take-home pay, then grows both at the same rate.
Other things that favor Roth
- No required minimum distributions from Roth accounts during your lifetime.
- Tax-free withdrawals don't push up taxes on Social Security or Medicare premiums.
- Heirs generally inherit Roth money tax-free.
The 2026 IRA limit is $7,500 ($8,600 if you're 50 or older). Roth IRA contributions phase out at higher incomes.
Frequently asked questions
Is Roth better if I'm young?
Often, because early-career income and tax brackets tend to be lower than later. But it depends on your current bracket and what you expect in retirement.
What is a Roth conversion?
Moving money from a traditional IRA or 401(k) to a Roth. You pay income tax on the amount converted that year. Conversions can make sense in low-income years, such as early retirement before Social Security starts.
Can I contribute to both a Roth and traditional account?
Yes. You can split contributions between Roth and traditional 401(k) accounts, and between Roth and traditional IRAs, as long as the total stays within each limit. Many people use both to keep options open in retirement.