Traditional vs. Roth 401(k)
Compare taxes now with taxes later—fairly.
Both paths use the same annual 401(k) contribution and the same hit to your spendable cash. The Traditional path invests its estimated tax savings in a taxable account, so the result does not quietly give Roth a larger cash commitment.
Uses 2026 federal tax brackets and 401(k) limits. Updated July 25, 2026.
Your comparison
$0
Enter your assumptions to compare after-tax retirement values.
Tax savings invested yearly$0
Traditional 401(k), after tax$0
Tax-savings account, after tax$0
Withdrawal tax stress test
Same Traditional balance, different withdrawal timing
Estimated tax uses 2026 federal brackets in today’s dollars, your filing status, other taxable income, and future state-rate assumption.
A withdrawal-pattern explanation appears here.
The decision line
Break-even future tax rate
Your break-even estimate will appear here.
Why this is an equal-cash-flow comparison
The Traditional path invests its tax savings so both choices reduce spendable cash by the same amount.
See the math and limitations
- Years invested
- 30
- 2026 contribution used
- $12,000
- Current tax-savings rate
- 27.8%
- Modeled withdrawal tax rate
- 0%
- Traditional before withdrawal tax
- $0
Roth value assumes a qualified distribution after age 59½ and the five-tax-year rule.
Plain-English guide
What the calculator is—and is not—comparing
Traditional contributions generally reduce federal taxable wages now, but the contribution and its earnings are taxable when withdrawn. Roth 401(k) contributions are taxed now, and qualified distributions are tax-free. Neither treatment is always better.
Traditional 401(k)
The calculator puts the same amount into the 401(k), estimates the current federal and state income-tax savings, and invests those savings in a taxable side account. At retirement, it estimates progressive tax on a lump sum or repeated annual withdrawals—or lets you supply a blended rate.
Roth 401(k)
The same contribution grows in the Roth account. The result assumes the withdrawal is qualified: at least five tax years after the first Roth contribution and on or after age 59½, disability, or death.
2026 contribution limits
The employee deferral limit is $24,500. If the plan allows catch-ups, the limit is $32,500 at age 50 or older, or $35,750 at ages 60–63. Traditional and Roth employee deferrals share one combined limit, and a plan may impose a lower limit.
Why withdrawal timing matters
Taking an entire Traditional balance in one tax year can place more dollars in higher brackets. Gradual withdrawals can reuse lower brackets over many years. This model estimates both using current-law 2026 federal brackets in today’s dollars; it is not a forecast of future tax law.
What salary and state do
Salary and filing status estimate the federal income tax saved by a Traditional contribution using 2026 brackets and the standard deduction. State rates are rough, editable planning defaults. Local taxes, credits, itemized deductions, spouse details, and state-specific basis rules are not fully modeled.
Important limitations
The model assumes level annual contributions and a steady return. Its withdrawal scenarios ignore investment growth during drawdown, required minimum distributions, Social Security taxation, itemized deductions, changing tax law, and interactions among retirement income sources. It also does not model employer matching, fees, or a mix of Roth and Traditional contributions.
Is Roth always better?
No. Roth tends to benefit when the future withdrawal tax rate is above the model’s break-even rate. Traditional can benefit when the future rate is lower. Tax diversification and plan rules can matter too.
Why invest the Traditional tax savings?
Without doing so, equal 401(k) contributions leave the Traditional saver with more spendable cash today. Investing that tax savings makes the household cash commitment comparable.
Do Traditional 401(k) contributions reduce Social Security and Medicare tax?
Generally no. The IRS says both pre-tax and Roth employee deferrals remain subject to Social Security and Medicare taxes, so this calculator does not count FICA savings.
Can I split contributions between both?
If your plan allows both, the IRS permits any split the plan supports, but the combined Traditional and Roth employee deferrals cannot exceed the annual limit.
Is the 20% withheld from a lump-sum distribution the actual tax?
Not necessarily. Federal withholding is a prepayment, not the final income-tax calculation. The calculator estimates progressive federal income tax instead; an actual return can produce more tax due or a refund.
Primary sources: IRS 401(k) tax treatment, IRS designated Roth accounts, IRS 2026 contribution limits, IRS 2026 brackets and standard deduction, IRS lump-sum distribution and withholding rules, and Pennsylvania contribution treatment.