Roth vs Traditional IRA Calculator 2025
Compare Roth IRA vs Traditional IRA after-tax wealth at retirement. Enter your tax brackets now and in retirement to find the optimal strategy.
IRA Comparison Parameters
After-Tax Comparison at Age 65
Come utilizzare Roth vs Traditional IRA Calculator 2025
Enter Your Age and Retirement Age
The time horizon affects how much compound growth occurs. More years = bigger difference between Roth and Traditional.
Set Current and Retirement Tax Brackets
If you expect a higher tax bracket in retirement (common for high earners), Roth is often better. If you expect a lower bracket in retirement, Traditional may win.
Enter Annual Contribution
2025 IRA limit is $7000 ($8,000 if age 50+). You can contribute to both Roth and Traditional, but the combined limit applies.
Compare After-Tax Values
The calculator shows after-tax wealth at retirement for each option. The better choice is the one with higher after-tax value.
Suggerimenti
- If you are unsure, contribute to both: max out Roth for tax-free growth, use Traditional for current-year deductions.
- Roth IRA contributions (not earnings) can be withdrawn any time tax and penalty free — useful as a secondary emergency fund.
- The 2025 IRA limit is $7000 ($8,000 if age 50+). Contributing the full amount every year dramatically impacts retirement wealth.
Domande frequenti
When is a Roth IRA better?
Roth is better when: (1) You expect to be in a higher tax bracket in retirement, (2) You are young and have many years of tax-free growth ahead, (3) You want tax diversification, or (4) You want to avoid Required Minimum Distributions (RMDs). Roth IRAs have no RMDs during the owner's lifetime.
When is a Traditional IRA better?
Traditional IRA is better when: (1) You expect a lower tax bracket in retirement, (2) You need the tax deduction now to reduce current tax liability, or (3) You are in a high income bracket today and expect significantly lower income in retirement.
Who can contribute to a Roth IRA?
For 2025: Single filers can contribute the full amount if income is under $150,000 (phased out to $165,000). Married filing jointly: full contribution under $236,000 (phased out to $246,000). There is no income limit for Traditional IRA contributions, but deductibility phases out at higher incomes.
Can I convert Traditional IRA to Roth?
Yes — this is called a "Roth conversion." You pay ordinary income tax on the converted amount in the year of conversion. This can be especially valuable in low-income years or years when the market is down (you convert more shares for the same tax cost).