Uncle Wayne's Toolkit · Retirement Planning

Roth vs Traditional IRA

See the after-tax cash each account leaves you with. The Traditional's yearly tax savings are invested in their own account and counted toward the comparison, so you see the true apples-to-apples result.

Your Contributions
$
The same amount goes into whichever account. The 2026 IRA limit is $7,500 ($8,600 if 50+).
%
Bumps your contribution up each year (e.g. with raises). Set to 0 for a flat amount.
Timeline & Returns
%
Applies to both the Roth and Traditional accounts — the difference between them is purely tax, not returns.
Traditional Tax Savings
%
The rate earned on the Traditional's yearly tax savings if you invest them. This is a regular taxable account, so you may want a lower rate than your IRA to reflect tax on its gains. These savings are counted as part of the Traditional in the comparison.
Tax Brackets
%
%
Use your marginal rate — the rate on your next dollar of income, not your average.
Not sure what to use in retirement?

Start from your expected retirement income, not your savings. Your bracket is set by what you'll actually draw each year. Many people land a notch or two lower than their working years — the salary is gone and you control how much you pull out.

But it can creep back up. A large pre-tax 401(k) or IRA forces big required withdrawals after age 73, Social Security and any pension stack on top, and the deductions you lean on now — mortgage interest, kids, your own pre-tax contributions — are mostly gone by then. Today's tax rates are also historically low and could rise.

If you genuinely can't tell, that uncertainty is the point. Splitting money between Roth and Traditional gives you both a tax-free and a taxable bucket to draw from, so you can steer your bracket in retirement instead of betting on one guess.

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Best choice
Roth value
$0
after-tax (tax-free)
Traditional balance
$0
before tax
Tax on Traditional
$0
Invested savings
$0
Roth IRA cash flow
You pay tax before the money goes in, so the ending balance is yours free and clear.
Traditional IRA cash flow
The IRA grows tax-free, then the whole balance is taxed as income on withdrawal. Each row reads as a running sum: pre-tax balance, plus tax (shown negative), plus the invested tax-savings account, equals the Total — the Traditional's true after-tax value, and what's compared against the Roth.
Traditional tax savings — invested separately
How this is calculated

Same contributions, same growth. The same dollar amount goes into each account every year (optionally growing for raises), and both earn the IRA return. With identical contributions and return, the two accounts reach an identical pre-tax balance — the only real difference is when the IRS taxes the money.

Roth. Funded with after-tax dollars, no deduction today. Growth and withdrawals are tax-free, so the ending balance is your cash to keep.

Traditional. Funded with pre-tax dollars. In retirement the entire balance is taxed as ordinary income at your retirement bracket, so the cash you keep is the balance times one-minus-that-rate. That after-tax figure is the Traditional's ending cash.

The tax savings — tracked separately, then counted. Each year the Traditional deduction saves you the contribution times your current bracket. That money is never inside the IRA, so it's invested in its own separate account at its own rate and shown in its own table — not mixed into the IRA balance.

How the winner is decided. Because a Traditional contribution costs you less out of pocket than the same Roth contribution, the fair comparison invests that difference. Both accounts grow to the same pre-tax balance, so the race comes down to one thing: the Traditional's invested tax savings versus the tax it owes on withdrawal. If the savings end up worth more than the tax, the Traditional wins; if not, the Roth wins. When the savings rate matches your IRA return and your two brackets are equal, the savings exactly cover the tax and it's a tie — the textbook result.

What's simplified. One flat retirement bracket on the whole balance; no RMDs, state tax, or Medicare/IRMAA effects; and the separate tax-savings account isn't taxed again at the end (lower its rate to approximate that drag). The 2026 IRA limit is $7,500 ($8,600 if 50+), and Roth eligibility phases out at higher incomes. A planning model, not tax advice.