Roth vs Traditional 401(k) Calculator

Neither is universally better — it comes down to one bet: your tax rate today versus your tax rate when you withdraw in retirement. A Roth 401(k) uses after-tax money now and pays nothing in retirement, so it wins if your tax rate will be the same or higher later. A traditional 401(k) gives you a deduction now and is taxed on withdrawal, so it wins if your tax rate will be lower in retirement. The calculator above shows the exact dollar gap for your numbers and the break-even retirement tax rate where the two tie — below it, go traditional; above it, go Roth.

In your peak earning years the traditional 401(k) is often the default, because the up-front deduction is worth the most when your marginal rate is high — a 32% or 37% bracket deduction is hard to beat, and many people genuinely drop a bracket or two in retirement. But it isn't automatic: if you expect tax rates to rise, want tax-free income and no required minimum distributions later, or are already saving the max and want to shelter more (a Roth's after-tax dollars effectively pack more into the same contribution limit), the Roth can still win. Note a 2026 rule change: if your prior-year wages topped about $150,000, your catch-up contributions must now go into the Roth side regardless.

The main downside is that you give up the tax deduction today, so your take-home pay drops more now than it would with a traditional 401(k) — the same $12,000 contribution costs you the full $12,000 of after-tax pay instead of roughly $8,800 after the deduction. You're effectively pre-paying tax at today's rate, which is a bad deal if your rate falls in retirement (for example, if you retire early, move to a no-income-tax state, or simply spend less than you earn now). The Roth only pays off if your future tax rate holds or climbs. The calculator shows exactly where that line sits for you.

For 2026 you can defer up to $24,500 of your own pay into a 401(k), whether you split it into Roth, traditional, or both — they share one combined limit. If you're 50 or older you can add an $8,000 catch-up ($32,500 total), and under SECURE 2.0 savers aged 60 to 63 get a larger $11,250 super catch-up ($35,750 total) that replaces the $8,000 for those years. Your employer's match is on top of these limits and is always pre-tax. From 2026, employees with prior-year wages above roughly $150,000 must make any catch-up contributions as Roth.

Yes, and many savers do — most plans let you split your contributions between the two, as long as the combined total stays within the annual limit ($24,500 for 2026). This is called tax diversification: you build both a tax-free bucket (Roth) and a tax-deferred bucket (traditional), then choose which to draw from each year in retirement to control your taxable income — useful for staying under a tax-bracket threshold, an ACA subsidy cliff, or a higher Medicare premium tier. If you're genuinely unsure which way your future tax rate will go, splitting hedges the bet.

No — as of 2024, designated Roth 401(k) accounts are no longer subject to lifetime required minimum distributions, matching the treatment of a Roth IRA. Traditional 401(k)s still force you to start taking taxable withdrawals at age 73 (rising to 75 later this decade) whether you need the money or not. That makes the Roth more flexible for estate planning and for letting your balance keep compounding untouched, which is one reason it can be worth choosing even when the pure tax-rate math is close.