Roth 401(k) vs Traditional 401(k) Calculator | Compare Taxes & Retirement Growth
Roth 401(k) and traditional 401(k) plans are employer-sponsored retirement accounts that differ primarily in their tax treatment.
Both allow workers to contribute a portion of their salary and invest for retirement, but they apply opposite tax structures to contributions and withdrawals.
A traditional 401(k) is funded with pre-tax dollars, deferring income taxes until withdrawal in retirement. A Roth 401(k) is funded with after-tax dollars, with qualified withdrawals generally tax-free.
Roth 401(k) vs Traditional 401(k) Calculator
Roth 401(k) may be worth more than a Traditional 401(k)
How We Calculate?
How to Fill Out WealthforSeniors Calculator
1. Current age
Enter your current age in years to determine how many years your money has to grow before retirement.
2. Current income
Input your annual pre-tax income (your salary before taxes are deducted).
This will help us determine how much you are able to contribute and how much tax you are currently paying under a Traditional 401(k) versus a Roth 401(k).
3. Current tax rate
Fill in your current marginal tax rate, which is the percentage of your income you pay in taxes today.
4. Retirement tax rate
This is your expected tax rate in retirement. It is the percentage you expect to pay when withdrawing money in retirement.
Traditional 401(k) withdrawals are taxed at this rate, while Roth 401(k) withdrawals are not taxed if qualified.
5. Hypothetical rate of return
The annual rate of return you expect your investments to earn to project how your retirement savings grow over time through compound interest.
6. Age at retirement
Enter the age you plan to retire. We use the difference between your current age and retirement age to calculate compounding growth.
7. Current annual contribution
In this field, enter the total amount you contribute to your 401(k) each year, including
- Employee contributions and
- Any consistent saving amount you allocate to retirement.
8. Pay frequency
Select how often you receive income (monthly, biweekly, semimonthly, weekly, or annually).
9. Current contribution type
Choose whether your current contributions are Traditional or Roth.
- Traditional contributions = pre-tax income and taxed later at withdrawal.
- Roth contributions = after-tax income and grow tax-free if qualified.
How this Roth 401(k) vs Traditional 401(k) Calculator works
Estimate how much your retirement savings will grow by starting with your current age and current retirement savings.
When calculating your retirement outcome, the calculator uses the following default assumptions:
- Retirement age of 65
- A 7% hypothetical rate of return
- Current tax rate of 24% and retirement tax rate of 22%
- Salary increases of 2% per year
- Pay frequency of the monthly income
Of course, you can change any of these default numbers by adjusting the input fields in the calculator.
Roth 401(k) Vs. Traditional 401(k) FAQs
A Traditional 401(k) uses pre-tax contributions with taxable withdrawals in retirement, while a Roth 401(k) uses after-tax contributions with tax-free qualified withdrawals.
It depends on your tax situation; a Traditional 401(k) may suit those expecting lower retirement taxes, while a Roth 401(k) may suit those expecting higher future taxes.
No, Roth 401(k) contributions do not reduce taxable income, while Traditional 401(k) contributions are made pre-tax and do.
No, many employer plans allow both Roth and Traditional 401(k) contributions, subject to the combined annual contribution limit.
No, Traditional 401(k) withdrawals are taxed as income, while Roth 401(k) withdrawals are tax-free if qualified.
