Roth or Traditional 401(k) — which wins after taxes?
The choice comes down to one question: will your tax rate be higher now or in retirement? A Traditional 401(k) skips tax today and pays it on withdrawal; a Roth pays tax now and comes out tax-free. Enter your salary, contribution rate, and the tax rates you expect, and this calculator shows the after-tax retirement value of each — plus a clear recommendation. Everything runs in your browser — nothing is uploaded.
How the comparison works
- Both options cost the same amount of pre-tax salary. In a Traditional 401(k) the full contribution goes in; in a Roth you pay income tax first, so a smaller after-tax amount is deposited but it grows and withdraws tax-free.
- The Traditional balance is taxed once at your retirement rate when withdrawn; the Roth is not taxed again.
- The 2026 employee deferral limit is $24,500 ($33,500 with the $8,000 age-50+ catch-up); this tool doesn't cap your entry against it.
- Contributions are modeled annually at a constant return, with no employer match, salary growth, or tax-bracket changes.
A simplified projection for planning, not tax advice. Real results depend on future tax law, bracket changes, an employer match (usually pre-tax regardless of your choice), and how your income evolves. Many savers split contributions across both to hedge.
Roth vs Traditional 401(k): the core trade-off
Both accounts shelter your investments from tax while they grow. The only difference is when you pay income tax on the money:
- Traditional 401(k) — contributions are pre-tax, lowering this year's taxable income. You pay ordinary income tax on every dollar you withdraw in retirement.
- Roth 401(k) — contributions are made with after-tax dollars, so there's no deduction today. Qualified withdrawals in retirement are completely tax-free.
If your tax rate were identical in both periods, the two would produce the exact same after-tax result. The decision therefore hinges on whether you expect a higher or lower tax rate in retirement than you face today.
When Roth usually wins
Roth tends to come out ahead when you expect to pay a higher rate later — for example, if you're early in your career and in a low bracket now, or if you believe tax rates will rise. Paying tax at today's low rate and locking in tax-free growth is the winning move. Roth also has no required minimum distributions during the original owner's lifetime after recent rule changes, which helps with estate planning and IRMAA management.
When Traditional usually wins
Traditional tends to win when your current rate is high and you expect to drop into a lower bracket in retirement — common for peak-earning professionals. Deducting the contribution at, say, a 32% rate and later withdrawing at 15–22% captures the spread. The up-front deduction also frees cash you can invest elsewhere or use to contribute more.
2026 contribution limits
For 2026 you can defer up to $24,500 as an employee across your 401(k) accounts, or $33,500 if you're 50 or older thanks to the $8,000 catch-up. These limits apply to your combined Roth and Traditional deferrals — you don't get a separate bucket for each. Employer matching is on top and is almost always deposited pre-tax, even if your own contributions are Roth.
Frequently asked questions
Should I choose a Roth or Traditional 401(k)?
Choose based on your tax rate now versus in retirement. If you expect a higher rate later, a Roth 401(k) usually wins because you lock in today's lower rate and withdraw tax-free. If your rate is high now and will fall in retirement, a Traditional 401(k) usually wins by capturing the deduction at the higher rate.
What is the 2026 401(k) contribution limit?
For 2026 the employee deferral limit is $24,500, or $33,500 if you're 50 or older with the $8,000 catch-up. This cap applies to your combined Roth and Traditional 401(k) contributions. Employer matching contributions are separate and don't count against it.
Why does the Roth deposit look smaller in the results?
Because the comparison holds your pre-tax cost equal. Putting the full contribution into a Traditional 401(k) is untaxed, but the same slice of salary is taxed before it can enter a Roth — so a smaller amount lands in the Roth. That amount then grows and comes out tax-free, which is exactly what makes the two comparable.
Can I contribute to both a Roth and Traditional 401(k)?
Yes. Many plans let you split your deferrals between Roth and Traditional. Doing so hedges against being wrong about future tax rates and gives you both taxable and tax-free money to draw from in retirement, which helps you manage your bracket year to year.
Does the employer match go into the Roth side?
Traditionally, employer matching went into the pre-tax (Traditional) side even when your own money was Roth. Recent law now allows Roth employer matches if the plan offers it, but a Roth match is treated as taxable income to you in the year it's made. Check how your specific plan handles it.
Are these figures in today's or future dollars?
Future (nominal) dollars at your chosen return. Because both accounts grow at the same rate over the same horizon, the ratio between them — and therefore the recommendation — is unaffected by inflation. Use the after-tax comparison, not the raw balance, to judge the winner.
See Roth and Traditional in your whole plan
Free, private, and running entirely in your browser. Model your accounts, taxes, and retirement together — and track plan vs. actual — no account required.