Roth vs Traditional IRA Calculator
Compare after-tax retirement values to see which IRA type works better for your tax situation. Uses 2025 contribution limits.
Roth vs Traditional — Key Comparison
| Roth IRA | Traditional IRA | |
|---|---|---|
| Tax treatment | After-tax contributions | Pre-tax (may be deductible) |
| Withdrawals in retirement | Tax-free | Taxed as ordinary income |
| Required Minimum Distributions | None during owner's lifetime | Required starting age 73 |
| Early withdrawal (before 59½) | Contributions anytime; earnings penalized | 10% penalty + taxes |
| Best for | Expect higher taxes in retirement | Expect lower taxes in retirement |
Frequently Asked Questions
What is the main difference between Roth and Traditional IRA?
The key difference is when you pay taxes. Traditional IRA: contributions may be tax-deductible now (reducing current taxable income), but withdrawals in retirement are taxed as ordinary income. Roth IRA: contributions are made with after-tax dollars (no current deduction), but qualified withdrawals in retirement are completely tax-free, including all the growth.
Should I choose Roth or Traditional IRA?
Generally: choose Roth if you expect to be in a higher tax bracket in retirement than you are now. Choose Traditional if you expect to be in a lower tax bracket in retirement. Young, lower-income earners often benefit from Roth. High-income earners near peak earning years often benefit from Traditional. Many financial advisors suggest using both (split contributions) to hedge against tax uncertainty.
What are the 2025 IRA contribution limits?
For 2025, the IRA contribution limit is $7,000 per year ($8,000 if you are age 50 or older). This limit applies to all your IRAs combined — you can split between Roth and Traditional, but the total cannot exceed $7,000. Roth IRA contributions also phase out at higher incomes: the phase-out begins at $150,000 (single) or $236,000 (married filing jointly) in 2025.
What are the income limits for Roth IRA in 2025?
For 2025, Roth IRA contributions phase out between $150,000–$165,000 (single/head of household) and $236,000–$246,000 (married filing jointly). If your income exceeds the upper limit, you cannot contribute directly to a Roth IRA. High earners can use a 'backdoor Roth IRA' — contributing to a non-deductible Traditional IRA and then converting it to Roth.
Can I have both a Roth and Traditional IRA?
Yes — you can contribute to both in the same year as long as your total contributions do not exceed the annual limit ($7,000 in 2025). You can also have a Roth IRA and a 401k simultaneously. Having both types provides tax diversification, giving you flexibility to withdraw from either account in retirement based on your tax situation each year.