Does this include growth?

No. The calculator focuses on the tax treatment of contributions and withdrawals, not on investment returns. If you assume the same rate of return and holding period for both Traditional and Roth, growth scales both balances similarly and the main difference still comes from whether you pay tax at the current rate or the retirement rate.

No, annual contribution limits and catch‑up rules are not enforced. The tool assumes you enter realistic deferral amounts that fit within IRS limits for the year. For accurate planning, always check the current 401(k) contribution limits (including catch‑up amounts if you are age 50 or older) and keep your total employee contributions across Roth and Traditional within those caps.

What about employer match tax status?

Employer contributions to a 401(k) are always made on a pre‑tax basis and sit in the Traditional side of the account, even when you choose Roth deferrals. This calculator shows the estimated match amount so you remember to include it in your planning, but it does not separately model its taxation; you can assume employer match dollars are taxed on withdrawal at your retirement tax rate.

Does this consider RMDs or 59½ rules?

No. Required minimum distributions, age‑59½ early withdrawal penalties, and detailed withdrawal strategies are outside the scope of this simple comparison. The goal is to highlight the directional tax trade‑off between paying tax now or later, not to model a full retirement income plan.

Use the calculator as a guide rather than a verdict. If you expect higher tax rates later or want more tax‑free income flexibility in retirement, leaning toward Roth often makes sense. If you expect to be in a much lower bracket after you stop working or need the extra take‑home pay today, Traditional may be more attractive. Many savers split contributions between the two to hedge their bets and then refine the strategy with help from a financial or tax professional.

Can I change my Roth vs Traditional choice later?

Most plans let you change your deferral mix prospectively—for example, you might start with mostly Roth contributions while your income is lower and then gradually shift toward Traditional as your income and current tax rate rise. You generally cannot retroactively reclassify past contributions, so it is worth revisiting this calculator each year or when your income, family situation, or tax law changes.

finance calculator

Roth 401(k) vs Traditional 401(k)

Compare take-home impact and retirement after-tax value for Roth vs Traditional 401(k) deferrals.

Results

Employee deferral amount: $10,000
Employer match: $4,000
Traditional: take-home reduction (after-tax cost): $7,800
Traditional: after-tax withdrawal (future): $8,000
Roth: take-home reduction (after-tax cost): $10,000
Roth: after-tax withdrawal (future): $10,000

Overview

Use this Roth 401(k) vs Traditional 401(k) calculator to see how each type of contribution affects your take-home pay today and the after-tax value of your savings later. Instead of arguing about whether it is better to pay taxes now or in retirement, you plug in your salary, contribution rate, current marginal tax rate, expected retirement tax rate, and employer match and get clear dollar figures for both options. That makes it much easier to decide whether to lean Roth, Traditional, or use a mix based on your own tax outlook and cash‑flow needs.

How to use this calculator

Enter your annual salary. If you receive variable bonuses or commissions, you can either include a typical amount or focus on base pay for a conservative comparison.
Choose an employee deferral percentage. Many people start around 5–10% of pay, but you can test higher rates, keeping annual IRS contribution limits in mind.
Enter your current marginal tax rate. This should reflect the rate applied to your last dollar of income when federal (and optionally state) taxes are considered, not your average effective rate.
Enter the marginal tax rate you expect to face in retirement on Traditional account withdrawals. You can model a lower rate if you expect to live on less income in retirement or a higher rate if you anticipate a larger portfolio or higher tax environment.
Add your employer match percentage if your plan offers one so you can see how much additional money is being added either way. Remember that employer contributions are always pre‑tax, even when you choose a Roth deferral.
Review the results for Traditional vs Roth: compare the drop in take‑home pay today and the estimated after‑tax withdrawal amount later. Run several what‑if scenarios with different tax rates to see whether your decision is robust or very sensitive to assumptions.

Inputs explained

Annual salary: Your gross annual pay from this employer before taxes and deductions. The calculator uses this number to compute both your employee deferral amount and the employer match based on the percentages you choose.
Employee deferral (%): The percentage of your salary you plan to contribute to the 401(k) each year. For example, at 10% on a $100,000 salary, your annual deferral is $10,000. This same deferral amount is used for both Roth and Traditional scenarios.
Current marginal tax rate (%): An estimate of the tax rate that applies to your last dollar of income today, often a combination of federal and state rates. It is used to approximate how much tax you avoid when making a pre‑tax Traditional deferral and therefore how much your take‑home pay drops after contributing.
Expected retirement tax rate (%): Your best guess at the marginal tax rate that will apply to Traditional withdrawals in retirement. If you expect to be in a lower bracket later, enter a smaller percentage; if you expect higher tax rates or a larger income, enter a higher percentage to model that risk.
Employer match (%): The employer match rate expressed as a percentage of your salary, such as 4% or 5%. The calculator assumes the match formula is uncomplicated and that the same match is provided whether you choose Roth or Traditional contributions.

How it works

First, the calculator computes your employee deferral amount as Salary × Deferral %. This is the amount that either goes in pre‑tax (Traditional) or after‑tax (Roth). It also estimates the employer match based on Salary × Employer match %; the match is the same regardless of whether you choose Roth or Traditional, so it is shown separately rather than used to pick a winner.

For Traditional 401(k) contributions, the tool assumes deferrals reduce your taxable income today. The immediate after‑tax cost of contributing is approximated as Deferral × (1 − Current tax rate), because each pre‑tax dollar you contribute avoids tax at your marginal rate. In retirement, every dollar withdrawn from the Traditional bucket is assumed to be taxed at your expected retirement tax rate, so the after‑tax withdrawal value is modeled as Deferral × (1 − Retirement tax rate).

For Roth 401(k) contributions, the tool assumes the full deferral is made with after‑tax dollars. That means your take‑home pay drops by the entire deferral amount in the current year (Roth take‑home reduction = Deferral), but qualified withdrawals in retirement are tax‑free. In the model, the Roth after‑tax withdrawal value is simply Deferral, because you have already paid the tax up front.

The calculator does not attempt to project investment returns separately for each option; instead, it focuses on relative tax treatment. If you assume the same rate of return and holding period for both accounts, growth multiplies both the Traditional and Roth balances similarly, and the key difference still comes down to whether you pay tax at the current rate or at the retirement rate.

By presenting both the immediate after‑tax cost and the estimated after‑tax retirement value side by side, the tool gives you a quick sense of when Roth tends to win (for example, when you expect to be in a higher bracket later) and when Traditional may be more attractive (when you expect a lower effective tax rate in retirement or need the higher take‑home pay today). You can run multiple scenarios with different tax rate assumptions to see how sensitive the choice is to your expectations.

Formula

Deferral = Salary × Deferral %
Match = Salary × Match %
Traditional take-home reduction = Deferral × (1 − Current tax)
Traditional after-tax withdrawal = Deferral × (1 − Retirement tax)
Roth take-home reduction = Deferral (after-tax dollars)
Roth after-tax withdrawal = Deferral (tax-free)

When to use it

Deciding whether to direct new contributions to a Roth 401(k) option your employer just added or to remain with Traditional pre‑tax deferrals.
Comparing scenarios if you expect your income and tax bracket to increase meaningfully later in your career and want to lock in today’s lower rates with Roth contributions.
Checking whether the higher take‑home pay from Traditional contributions today is worth the trade‑off of paying tax on withdrawals later if you are focused on aggressive debt payoff or cash‑flow flexibility.
Explaining the Roth vs Traditional trade‑off to a spouse or coworker using concrete examples instead of abstract tax jargon so you can agree on a contribution strategy.
Modeling different retirement tax environments (for example, possible future tax hikes) to stress‑test whether your preference for Roth or Traditional is still comfortable under less favorable assumptions.

Tips & cautions

If you expect significantly higher income later (such as a medical residency to attending physician jump or big promotion track), leaning more heavily into Roth while you are in lower brackets often makes sense.
Remember that the IRS employee deferral limit applies to the combined total of your Roth and Traditional 401(k) contributions. You cannot double the limit by splitting between the two; the calculator assumes deferrals stay within annual limits.
Do not forget that employer match money is always pre‑tax in the Traditional bucket, even when you choose Roth deferrals. When thinking about your overall tax mix, include that pre‑tax match balance in your planning.
Consider splitting contributions between Roth and Traditional if you are unsure about future tax rates. Having both pre‑tax and Roth buckets in retirement gives you more flexibility to manage your tax bracket year by year.
This is a simplified comparison focused on contribution tax treatment. It does not model investment growth, contribution limit phase‑outs, catch‑up contributions, RMD rules, or detailed withdrawal strategies.
Tax rates are modeled as flat percentages for the current year and retirement, not full progressive tax brackets. Real‑world outcomes may differ if you move between brackets or manage withdrawals to target specific bracket thresholds.
The employer match is shown as an additional dollar amount but is not fully modeled through time; it is assumed to be the same regardless of your choice and remains in the Traditional side for tax purposes.
Plan‑specific rules, Roth availability, and tax law changes are not incorporated. Always verify your actual plan documents and current IRS guidance before making decisions.

Worked examples

$100k salary, 10% deferral, 4% match, 22% now, 20% retirement

Annual salary = $100,000; employee deferral rate = 10%; employer match = 4%.
Deferral = $100,000 × 10% = $10,000; Match = $100,000 × 4% = $4,000.
Current marginal tax rate = 22%; expected retirement tax rate = 20%.
Traditional take‑home reduction ≈ Deferral × (1 − 0.22) = $10,000 × 0.78 = $7,800; you give up about $7,800 in spendable income today to contribute $10,000 pre‑tax.
Traditional after‑tax withdrawal ≈ Deferral × (1 − 0.20) = $10,000 × 0.80 = $8,000; each $10,000 of pre‑tax balance is worth about $8,000 after retirement taxes at 20%.
Roth take‑home reduction = $10,000 (you contribute after‑tax dollars) and Roth after‑tax withdrawal = $10,000, because qualified Roth withdrawals are tax‑free in this simplified model.
Interpretation: in this scenario, Traditional gives you a smaller hit to take‑home pay today but a smaller after‑tax withdrawal later; Roth costs more up front but gives you the full $10,000 after tax in retirement.

$150k salary, 8% deferral, 22% now, 12% retirement

Annual salary = $150,000; employee deferral rate = 8%; no match included for simplicity.
Deferral = $150,000 × 8% = $12,000.
Current marginal tax rate = 22%; expected retirement tax rate = 12% (assuming a lower bracket after you stop working).
Traditional take‑home reduction ≈ $12,000 × (1 − 0.22) = $12,000 × 0.78 = $9,360; you give up about $9,360 of take‑home pay to make the contribution.
Traditional after‑tax withdrawal ≈ $12,000 × (1 − 0.12) = $12,000 × 0.88 = $10,560.
Roth take‑home reduction = $12,000 and Roth after‑tax withdrawal = $12,000.
Interpretation: because you expect to pay only 12% on withdrawals later, the Traditional option looks relatively more attractive—you get a smaller hit to take‑home pay now and still keep most of the contribution after tax in retirement. Roth still provides tax‑free income but costs more today for a smaller relative tax benefit.

Lower-income saver expecting higher future taxes

Assume salary = $60,000, deferral rate = 7%, current marginal tax rate = 12%, expected retirement tax rate = 22% (for example, if you expect higher income later or worry about rising tax rates).
Deferral = $60,000 × 7% = $4,200.
Traditional take‑home reduction ≈ $4,200 × (1 − 0.12) = $3,696; Traditional after‑tax withdrawal ≈ $4,200 × (1 − 0.22) = $3,276.
Roth take‑home reduction = $4,200; Roth after‑tax withdrawal = $4,200.
Interpretation: in this case, paying 12% tax now to lock in Roth may be attractive compared with potentially paying 22% later on Traditional withdrawals. The calculator makes that trade‑off visible in dollar terms.

Deep dive

This Roth vs Traditional 401(k) calculator helps you move beyond rules of thumb by showing the trade‑off between take‑home pay today and after‑tax withdrawal value in retirement. Enter your salary, contribution rate, current marginal tax rate, expected retirement tax rate, and employer match to see side‑by‑side numbers for each option.

Because it focuses on after‑tax effects, the tool makes it clear when Roth contributions may be attractive—such as when you expect higher taxes later or want tax‑free income in retirement—and when Traditional contributions might be more efficient, such as when you are temporarily in a high bracket and plan to withdraw in a lower one.

Use the outputs as a starting point for more detailed planning with a financial advisor or tax professional. You can also rerun the calculator with different tax assumptions, deferral percentages, or match structures to test how sensitive your decision is to changes in income, tax law, or employer benefits over time.

FAQs

Does this include growth?: No. The calculator focuses on the tax treatment of contributions and withdrawals, not on investment returns. If you assume the same rate of return and holding period for both Traditional and Roth, growth scales both balances similarly and the main difference still comes from whether you pay tax at the current rate or the retirement rate.
Are limits applied?: No, annual contribution limits and catch‑up rules are not enforced. The tool assumes you enter realistic deferral amounts that fit within IRS limits for the year. For accurate planning, always check the current 401(k) contribution limits (including catch‑up amounts if you are age 50 or older) and keep your total employee contributions across Roth and Traditional within those caps.
What about employer match tax status?: Employer contributions to a 401(k) are always made on a pre‑tax basis and sit in the Traditional side of the account, even when you choose Roth deferrals. This calculator shows the estimated match amount so you remember to include it in your planning, but it does not separately model its taxation; you can assume employer match dollars are taxed on withdrawal at your retirement tax rate.
Does this consider RMDs or 59½ rules?: No. Required minimum distributions, age‑59½ early withdrawal penalties, and detailed withdrawal strategies are outside the scope of this simple comparison. The goal is to highlight the directional tax trade‑off between paying tax now or later, not to model a full retirement income plan.
How to decide?: Use the calculator as a guide rather than a verdict. If you expect higher tax rates later or want more tax‑free income flexibility in retirement, leaning toward Roth often makes sense. If you expect to be in a much lower bracket after you stop working or need the extra take‑home pay today, Traditional may be more attractive. Many savers split contributions between the two to hedge their bets and then refine the strategy with help from a financial or tax professional.
Can I change my Roth vs Traditional choice later?: Most plans let you change your deferral mix prospectively—for example, you might start with mostly Roth contributions while your income is lower and then gradually shift toward Traditional as your income and current tax rate rise. You generally cannot retroactively reclassify past contributions, so it is worth revisiting this calculator each year or when your income, family situation, or tax law changes.

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This Roth vs Traditional 401(k) calculator provides simplified estimates for educational purposes only. It does not account for every tax rule, contribution limit, plan feature, investment return, or retirement income strategy, and it uses flat marginal tax rates rather than full tax bracket calculations. Before making contribution or withdrawal decisions, review your specific 401(k) plan documents and consult a qualified tax professional or financial advisor to ensure the approach fits your overall situation.