Roth vs Traditional IRA Calculator
Compare Roth and Traditional IRA accounts to find the best retirement savings strategy based on your current and future tax situation.
Your Information
Enter your details to compare Roth vs Traditional IRA
2024 limit: $7,000 ($8,000 if 50+)
Tax Brackets
Your current and expected retirement tax rates
Understanding IRAs
Individual Retirement Accounts (IRAs) are tax-advantaged investment accounts that help you save for retirement. The two main types - Traditional and Roth - differ primarily in when you pay taxes on your contributions and withdrawals.
The Core Difference: Traditional IRAs offer tax benefits now (deductible contributions), while Roth IRAs offer tax benefits later (tax-free withdrawals).
2024 IRA Contribution Limits
Under Age 50
$7,000
Annual contribution limit
Age 50 and Over
$8,000
Including $1,000 catch-up
Combined Limit
Both
Limit applies to all IRAs combined
Traditional IRA Benefits
- Immediate tax deduction reduces your taxable income
- Tax-deferred growth until withdrawal
- No income limits for contributions
- May lower your current tax bracket
Roth IRA Benefits
- Tax-free withdrawals in retirement
- No Required Minimum Distributions (RMDs)
- Contributions can be withdrawn penalty-free anytime
- Great for estate planning - heirs inherit tax-free
Income Limits for 2024
| Filing Status | Roth IRA Limit | Traditional IRA Deduction |
|---|---|---|
| Single | Full: <$146,000 Phases out: $146k-$161k | Full: <$77,000 (with 401k) No limit without 401k |
| Married Filing Jointly | Full: <$230,000 Phases out: $230k-$240k | Full: <$123,000 (with 401k) No limit without 401k |
* Traditional IRA deduction limits apply only if you or your spouse has a workplace retirement plan.
Decision Framework
Choose Roth If...
- • You're early in your career with lower income
- • You expect higher income/taxes in retirement
- • You want flexibility to access contributions early
- • You want to leave tax-free money to heirs
Choose Traditional If...
- • You're in your peak earning years
- • You need the tax deduction now
- • You expect lower taxes in retirement
- • You exceed Roth income limits
Consider Both If...
- • You want tax diversification in retirement
- • You're unsure about future tax rates
- • You want maximum flexibility
- • You're doing backdoor Roth conversions
Important Considerations
- 1.5-Year Rule (Roth): Earnings are only tax-free if the account is at least 5 years old and you're 59½+.
- 2.RMDs (Traditional): You must start taking required distributions at age 73, even if you don't need the money.
- 3.Early Withdrawal: Before 59½, Traditional withdrawals face 10% penalty + taxes. Roth contributions (not earnings) can be withdrawn penalty-free.
- 4.Backdoor Roth: High earners can contribute to a Traditional IRA and convert to Roth (beware of the pro-rata rule).
- 5.State Taxes: Some states don't tax retirement income - this affects the Traditional vs Roth decision.