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What will your next retirement dollar be taxed at?
Enter your expected retirement income — the calculator fills the 2026 federal brackets bottom-to-top and finds your true marginal rate.
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Retirement marginal tax rate calculator
Roth or Traditional comes down to one comparison: your tax rate today versus the rate on your next dollar in retirement. Enter your expected Social Security, pension, and IRA income and the calculator finds your true retirement marginal rate — including the Social Security "bump zone" most calculators miss.
How your retirement tax rate is actually computed
The federal tax code taxes income in layers: the first slice of taxable income at 10%, the next at 12%, and so on up to 37%. Your bracket is just the layer your last dollar lands in — and your marginal rate is the tax on your next dollar. Retirement income fills those layers from the bottom, after the standard deduction wipes out the first chunk entirely. That is why a retiree with $70,000 of income can owe tax at an average rate under 10% while their next dollar is taxed at 22%: the average blends all the layers; the margin only sees the top one.
$16,1002026 standard deduction, single filer
10–37%Seven federal brackets on taxable income
$6,000Temporary senior bonus deduction per person 65+, 2025–2028
85%Maximum share of Social Security benefits that is taxable
The formula
Provisional income = other income + 50% of Social Security benefits · Taxable Social Security = 0% / 50% / 85% of benefits by provisional-income thresholds · AGI = taxable Social Security + pension + IRA/401(k) + other income · Taxable income = AGI − standard deduction − 65+ extras · Marginal rate = bracket rate × (1 + Social Security bump of 0, 0.50, or 0.85)
Worked example: single retiree, $47,000 plus Social Security
Take $28,000 of Social Security, a $12,000 pension, $30,000 of IRA withdrawals, and $5,000 of other income. Provisional income = $47,000 + $14,000 = $61,000 — above the $34,000 threshold, so 85% of the Social Security benefit ($23,800) is taxable. AGI = $23,800 + $47,000 = $70,800. Subtract the $16,100 standard deduction: taxable income = $54,700. The tax: 10% on the first $12,400 ($1,240), 12% on the next $38,000 ($4,560), 22% on the remaining $4,300 ($946) — total $6,746, an effective rate of just 9.5%. But the next dollar is taxed at 22%, and there is $51,000 of headroom before the 24% bracket — prime Roth-conversion territory.
Now the twist that decides Roth vs Traditional: if this retiree's current working marginal rate is also 22%, the two sides tie — order does not matter. At a 12% working rate, Roth would win the next dollar; at 24%, Traditional would. The average 9.5% never enters the decision. That is the marginal-vs-marginal rule.
Where this comes in handy
- The Roth-vs-Traditional decision: compare the rate above against your current bracket — the higher rate loses. Read the full reasoning in our marginal-vs-marginal guide.
- Roth conversions in low-income years: the "headroom" number is your conversion budget — fill the current bracket without tipping into the next.
- Withdrawal sequencing: see how each extra $1,000 of IRA withdrawal ripples through Social Security taxation before you take it.
- Dodging the bump zone: if the calculator flags the Social Security bump, shifting income (Roth withdrawals, timing) can cut your true marginal rate nearly in half.
- RMD reality checks: plug in your projected required minimum distributions to see which bracket they land you in — many diligent savers are surprised.
For the most-shared misconception in this whole debate — comparing today's bracket to your average retirement rate — read the guide The Roth vs. Traditional mistake everyone makes. To price one specific contribution, use the Roth vs Traditional 401(k) calculator.
Retirement marginal tax rate — frequently asked questions
What exactly is my marginal tax rate in retirement?
The tax on your next dollar of income — not your average rate across all income. Brackets fill bottom-to-top, so a retiree can pay an average rate of 9% while the next dollar is taxed at 22%. Contribution and conversion decisions always hinge on the margin, never the average.
Why is my true marginal rate higher than my tax bracket?
You are probably in the Social Security "bump zone." While extra ordinary income is dragging more of your Social Security benefits into tax, each $1 of IRA or pension income adds $1.50 (or $1.85) to your taxable income. In the 12% bracket that makes the true marginal rate about 22% — nearly double the bracket — until 85% of your benefits are already taxable and the bump ends.
How is Social Security taxed?
By "provisional income": other income plus half your benefits. Below $25,000 ($32,000 joint), none of your benefits are taxable. From there to $34,000 ($44,000 joint), up to 50% becomes taxable; above that, up to 85%. These thresholds have never been inflation-indexed, so more retirees cross them every year.
What is the senior bonus deduction for 2025–2028?
A temporary extra deduction of $6,000 per person 65 or older ($12,000 if both spouses qualify on a joint return) — on top of the standard deduction and the regular 65+ extra amount. It phases out above $75,000 of income ($150,000 joint) and expires after 2028. Tick the 65+ box and the calculator applies it with the phase-out.
Should this number decide Roth vs Traditional for me?
It is the single most important input: compare this retirement marginal rate against your current marginal rate. Higher now → favor Traditional (take the bigger deduction). Higher later → favor Roth (pay the smaller tax today). Equal → it is a tie, and flexibility tiebreakers decide. Our marginal-vs-marginal guide walks through the reasoning and the traps.
Does this include state taxes?
No — federal only. Add your state's marginal rate on top of the result for the full picture. (Two states, California and New Jersey, also tax HSA contributions — see our HSA tax savings calculator if that applies to you.)
What about required minimum distributions?
Include them in the IRA/401(k) withdrawals field — RMDs are ordinary income and they stack on top of everything else, which is exactly how diligent savers end up in a higher bracket retired than they ever saw while working. If the projection surprises you, Roth conversions in your 60s are the usual fix.
How accurate is this estimate?
It is a planning-grade estimate: 2026 federal brackets, the standard deduction, the senior extras, and the Social Security taxation rules, computed precisely. It does not itemize deductions, stack capital-gains rates, or apply credits — close enough to steer Roth, conversion, and withdrawal decisions, not a substitute for running your actual return.