Comparison of Roth vs Traditional IRA 2025
Compare after-tax retirement income between Roth IRA and Traditional IRA. Enter your current tax brackets and retirement to find the optimal strategy.
Comparison Parameters IRA
Confronto dopo le tasse all'età di 65
Come utilizzare Confronto Roth vs Traditional IRA 2025
Insert your age and retirement age
Time horizon influences compound growth. More years = greater difference between Roth and traditional.
Set current tax brackets and retirement income
Be concise — keep similar length. If you predict a higher tax bracket at retirement (common for those with high incomes), the Roth is often better. If you predict a lower tax bracket at retirement, the Traditional might be more suitable.
Insert annual contribution
Il limite IRA 2025 è $7,000 ($8.000 se hai 50+ anni). Puoi contribuire sia a Roth che a Traditional, ma si applica il limite combinato.
Compare values after taxes
The calculator shows net worth after taxes at retirement for each option. The best choice is the one with the highest net value.
Suggerimenti
- If you're unsure, contribute to both: Maximize Roth for tax-free growth, use Traditional for current year deductions.
- Contributions to a Roth IRA can be withdrawn at any time without taxes or penalties, useful as an emergency secondary fund.
- Il limite IRA 2025 è $7,000 ($8.000 se hai 50+ anni). Contribuire l'intero importo ogni anno incide drasticamente sul patrimonio pensionistico.
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).