Roth 401(k) Calculator (2026)
A Roth 401(k) uses after-tax dollars and grows tax-free; a Traditional 401(k) is pre-tax and taxed at withdrawal. The rule of thumb: Roth wins if your retirement tax rate is higher than today's, Traditional if it is lower. At a 29.65% marginal rate, Roth costs more take-home now but can pay off later. Compare your numbers below.
Roth or Traditional 401(k) — which is better?
Roth wins if your tax rate in retirement is higher than now; Traditional wins if it is lower.
What is the difference?
Roth contributions are after-tax and grow tax-free; Traditional contributions are pre-tax and taxed at withdrawal.
What does Roth cost in take-home now?
At a 29.65% marginal rate, a $10,000 Roth contribution costs about $2,965.00 more take-home than Traditional.
Why choose Roth if Traditional saves tax now?
Tax-free growth, no required withdrawals, and protection if tax rates rise — tax diversification.
What is the difference between a Roth and Traditional 401(k)?
A Traditional 401(k) contribution is pre-tax: it lowers your taxable income now, but withdrawals in retirement are taxed as income. A Roth 401(k) contribution is after-tax: no deduction today, but qualified withdrawals are completely tax-free.
Both grow without yearly tax drag. The choice is really a bet on whether your tax rate will be higher or lower in retirement than it is today.
How does the calculator compare them?
| Feature | Traditional 401(k) | Roth 401(k) |
|---|---|---|
| Contributions | Pre-tax (deduction now) | After-tax (no deduction) |
| Take-home today | Higher | Lower |
| Withdrawals | Taxed as income | Tax-free |
| Best when | Lower rate in retirement | Higher rate in retirement |
Which one should you choose?
If you expect a higher tax bracket later — early career, or you believe rates will rise — Roth usually wins. If you are at peak earnings now and expect lower income in retirement, Traditional often wins. Many savers split contributions for tax diversification.
What does Roth cost you today?
Because there is no deduction, a Roth contribution reduces your take-home by the contribution times your marginal rate more than the same Traditional contribution. The calculator shows that yearly cost so you can decide if the future tax-free benefit is worth it.
How do you decide step by step?
- Estimate your current marginal tax rate (the calculator derives it from your salary).
- Estimate your tax rate in retirement.
- Compare: higher later favors Roth, lower later favors Traditional.
- Check the after-tax retirement values and the take-home cost today.