Traditional IRA, after tax at withdrawal: $442,076.48
Roth IRA, already tax-free: $430,741.19
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Disclaimer
This calculator provides estimates for informational purposes only and does not constitute financial, medical, legal, or tax advice. Always consult a qualified professional about your specific situation.
How This Calculator Works
A Traditional IRA is taxed on withdrawal; a Roth IRA is taxed upfront and withdrawn tax-free —
which one leaves you with more money depends on whether your tax rate is higher now or in
retirement. Enter how much you plan to contribute each year, how long it will grow, your
expected return, and your tax rate today versus in retirement, and this calculator compares the
two.
For the same pre-tax dollars available to save, a Traditional IRA contribution goes in whole and
grows tax-deferred, with tax owed on the full amount when you withdraw it. A Roth IRA
contribution is taxed today — so only (1−your current tax rate) of that dollar
actually makes it into the account — but it then grows completely tax-free, with nothing owed at
withdrawal.
A useful fact worth knowing before you dig into the numbers: if your tax rate never changes
between now and retirement, Traditional and Roth produce exactly the same after-tax result. The
two only diverge because tax rates usually differ between today and retirement — a lower rate in
retirement favors Traditional, and a higher rate favors Roth.
The Formula
Traditional After-Tax Value=FV(contributions)×(1−Retirement Tax Rate)Roth After-Tax Value=FV(contributions×(1−Current Tax Rate))
Where FV(contributions) is the standard future-value-of-annuity formula, compounding a
level series of annual contributions at your expected return.
Worked Example
Contributing $6,000 per year for 30 years, growing at 7% annually, taxed at 24% today
but only 22% in retirement:
Traditional IRA: the full $6,000/year grows to about $566,765 pre-tax, then loses 22% to
tax on withdrawal, leaving ≈ $442,076.
Roth IRA: only $6,000 × (1 − 24%) = $4,560 actually gets contributed each year, growing
tax-free to ≈ $430,741.
Traditional comes out about $11,335 ahead in this case, because the 22% retirement tax
rate is lower than the 24% rate paid today.
Cómo funciona esta calculadora
Una IRA Tradicional se grava al momento del retiro; una IRA Roth se grava por adelantado y se
retira libre de impuestos — cuál de las dos te deja con más dinero depende de si tu tasa de
impuestos es más alta ahora o en el retiro. Ingresa cuánto planeas contribuir cada año, durante
cuánto tiempo crecerá, tu retorno esperado y tu tasa de impuestos actual frente a la del retiro, y
esta calculadora compara ambas opciones.
Para los mismos dólares antes de impuestos disponibles para ahorrar, una contribución a una IRA
Tradicional entra completa y crece con impuestos diferidos, debiéndose el impuesto sobre el monto
total cuando la retiras. Una contribución a una IRA Roth se grava hoy — así que solo
(1−tu tasa de impuestos actual) de ese dólar realmente llega a la cuenta — pero luego
crece completamente libre de impuestos, sin deber nada al momento del retiro.
Un dato útil antes de entrar en los números: si tu tasa de impuestos nunca cambia entre ahora y
el retiro, la IRA Tradicional y la Roth producen exactamente el mismo resultado después de
impuestos. Las dos solo difieren porque las tasas de impuestos suelen ser distintas entre hoy y
el retiro — una tasa más baja en el retiro favorece a la Tradicional, y una tasa más alta favorece
a la Roth.
La fórmula
Valor tradicional despueˊs de impuestos=VF(contribuciones)×(1−Tasa de impuestos en el retiro)Valor Roth despueˊs de impuestos=VF(contribuciones×(1−Tasa de impuestos actual))
Donde VF(contribuciones) es la fórmula estándar de valor futuro de una anualidad,
capitalizando una serie constante de contribuciones anuales a tu retorno esperado.
Ejemplo resuelto
Contribuyendo $6,000 por año durante 30 años, creciendo a un 7% anual, gravado al 24%
hoy pero solo al 22% en el retiro:
IRA Tradicional: los $6,000/año completos crecen a aproximadamente $566,765 antes de
impuestos, luego pierde 22% en impuestos al retirar, dejando ≈ $442,076.
IRA Roth: solo se contribuyen realmente $6,000 × (1 − 24%) = $4,560 cada año, creciendo
libre de impuestos a ≈ $430,741.
La Tradicional termina aproximadamente $11,335 por delante en este caso, porque la tasa de
impuestos del 22% en el retiro es más baja que la tasa del 24% pagada hoy.
Because it's the entire difference between the two accounts. A Traditional IRA defers tax until withdrawal; a Roth IRA pays it upfront. If your tax rate is exactly the same both times, the two produce identical after-tax results — the account type only matters because tax rates usually differ between working years and retirement.
Why is the Roth contribution shown as smaller than the Traditional one?
Because a Roth contribution is made with money you've already paid tax on. For the same pre-tax paycheck dollar, you can either put the whole thing into a Traditional account and pay tax later, or pay tax on it now and put what's left into a Roth account — this calculator assumes the same pre-tax dollars are available either way, which is the fair way to compare them.
Can I contribute to both types, and does that change this calculator's math?
Yes, and many people do — this calculator isn't an either-or recommendation, just a way to see which type of dollar is more efficient at your specific tax rates. IRS contribution limits (which change periodically and apply across both account types combined) aren't modeled here; check the current limit before assuming you can contribute the full amount used in this calculator.
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