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Traditional IRA vs Roth IRA
Same contribution, same return, same years — the traditional IRA is taxed at withdrawal, the Roth is taxed now. Change the two brackets and watch the winner flip.
★ MONEY · IRA COMPARISON · TRADITIONAL VS ROTH
Traditional vs Roth IRA: Which Wins After Tax? 2026
Traditional wins by $30,746.62 — $270,570.25 after tax against the Roth’s $239,823.63. Same $7,500 a year, same 7% return, same 20 years. The only thing that decides the winner is the tax bracket now versus the tax bracket in retirement — not the return, and not the number of years.
Why the brackets decide everything
On the defaults — $7,500 a year, 20 years, 7% return, 22% now, 12% in retirement — the annuity factor is 40.9954923212: each $1 a year becomes $40.9954923212 after 20 years at 7%. The traditional IRA puts the full $7,500 in each year, so its pre-tax balance is $7,500.00 × 40.9954923212 = $307,466.19; after 12% retirement tax it is $270,570.25. The Roth pays 22% now, so only $5,850.00 a year goes in, and its balance is $5,850.00 × 40.9954923212 = $239,823.63, tax-free. The traditional wins by $30,746.62 — and the return and the years never enter the comparison, because both sides grow by the same factor. Only the two brackets matter.
| Scenario | Traditional after tax | Roth (tax-free) | Winner |
|---|---|---|---|
| Defaults (22% now, 12% later) | $270,570.25 | $239,823.63 | Traditional by $30,746.62 |
| Retirement bracket 24% | $233,674.31 | $239,823.63 | Roth by $6,149.32 |
| Current 12%, retirement 22% | $239,823.63 | $270,570.25 | Roth by $30,746.62 |
| 30 years | $623,441.19 | $552,595.60 | Traditional by $70,845.59 |
| Return 5% | $218,235.30 | $193,435.83 | Traditional by $24,799.47 |
| Contribution $8,600 (age 50+) | $310,253.89 | $274,997.76 | Traditional by $35,256.12 |
| Current bracket 32% | $270,570.25 | $209,077.01 | Traditional by $61,493.24 |
Check the identities: annuity factor F = ((1 + return)^years − 1) ÷ return; traditional pre-tax = contribution × F; traditional after tax = pre-tax × (1 − retirement bracket); Roth = contribution × (1 − current bracket) × F; out of pocket per year: traditional = contribution × (1 − current bracket) = $5,850.00, Roth = contribution = $7,500.00; over 20 years $117,000.00 vs $150,000.00; total tax paid: traditional = pre-tax − after tax = $36,895.94, Roth = contribution × current bracket × F = $67,642.56. The traditional costs $33,000.00 less out of pocket over 20 years and pays $30,746.62 less tax in total — the same $30,746.62 it wins by.
The worked example, line by line
Setup: $7,500.00 a year, 20 years, 7% return, current bracket 22%, retirement bracket 12%.
Line 1 — the factor. ((1.07)^20 − 1) ÷ 0.07 = 40.9954923212.
Line 2 — the traditional pre-tax balance. $7,500.00 × 40.9954923212 = $307,466.19.
Line 3 — the traditional after tax. $307,466.19 × (1 − 12%) = $307,466.19 × 0.88 = $270,570.25.
Line 4 — the Roth. $7,500.00 × (1 − 22%) = $5,850.00 a year in; $5,850.00 × 40.9954923212 = $239,823.63, tax-free.
Line 5 — the winner. $270,570.25 − $239,823.63 = $30,746.62 for the traditional. Out of pocket: $5,850.00 a year traditional ($117,000.00 over 20 years) against $7,500.00 a year Roth ($150,000.00 over 20 years).
Reverse: the retirement bracket where the two tie is 22.00% — exactly the current bracket; the forward tie is $0.00. The current bracket where the two tie is 12.00% — exactly the retirement bracket; the forward tie is $0.00. The retirement bracket for a Traditional win of exactly $25,000 is 13.87% (exact 13.8690%); the forward win at the displayed bracket is $24,997.00 — $3 under the $25,000 target, which is rounding. The contribution for a Traditional win of $50,000 is $12,196.46/yr (exact $12,196.4629); the forward win is $49,999.99 — 1¢ under the target, which is rounding. The years for a Traditional win of $50,000 are 26 years (25-year win $47,436.78; 26-year win $51,507.35). The return for a Traditional win of $40,000 is 9.37% (exact 9.3699%); the forward win is $40,000.67 — 67¢ over the target, which is rounding.
Every branch, checked
Retirement bracket 24%: Traditional $233,674.31, Roth $239,823.63 — Roth wins by $6,149.32. When the retirement bracket rises above the current 22%, the Roth takes the lead — the traditional’s whole balance is taxed at the higher rate.
Current 12%, retirement 22%: Traditional $239,823.63, Roth $270,570.25 — Roth wins by $30,746.62. Paying 12% now beats paying 22% later by exactly the mirror image of the default win — the two scenarios are the same numbers swapped.
30 years: Traditional $623,441.19, Roth $552,595.60 — Traditional wins by $70,845.59. Ten more years more than doubles the win, because the factor grows — but the winner is still decided by the brackets alone.
Return 5%: Traditional $218,235.30, Roth $193,435.83 — Traditional wins by $24,799.47. A lower return shrinks both balances and the win, but never flips it — the return cannot change who wins.
Contribution $8,600 (age 50+): Traditional $310,253.89, Roth $274,997.76 — Traditional wins by $35,256.12. The $1,100 catch-up lifts both sides and the win together.
Current bracket 32%: Traditional $270,570.25, Roth $209,077.01 — Traditional wins by $61,493.24. A high bracket today makes the Roth expensive: only $5,100.00 a year goes in after 32% tax.
What the defaults assume
The model assumes annual contributions at year-end (an ordinary annuity), the same pre-tax contribution every year, and the same return every year on both sides. It assumes the traditional IRA’s whole balance is taxed once at the retirement bracket, and the Roth is taxed once at the current bracket with no tax after that. It assumes no employer match, no fees, no required minimum distributions, and no Roth income limits — the 2026 IRA limit is $7,500 under 50 and $8,600 at 50+. When the two brackets are equal the two IRAs tie exactly: at 22% and 22% both are $239,823.63, a $0.00 difference; at 37% and 37% both are $193,703.70. With a 0% retirement bracket the traditional keeps the whole $307,466.19 and wins by $67,642.56. With a 0% current bracket the Roth keeps the whole $307,466.19 and wins by $36,895.94. Over 1 year the traditional is $6,600.00 and the Roth is $5,850.00 — the traditional wins by $750.00, which is just the first year’s tax difference. Rounding convention: totals are computed from unrounded values, so rounded parts may differ by a cent from their rounded sum; the reverses are nearest-value solutions, and the exact unrounded figures (13.8690%, $12,196.4629, 9.3699%) are stated wherever the rounded figures appear. This comparison is one of the site’s head-to-head comparisons — see the full set on the comparisons hub.
Output · formula · meaning
| Output | Formula | What it means |
|---|---|---|
| Annuity factor | ((1 + return)^years − 1) ÷ return | 40.9954923212. |
| Traditional pre-tax balance | contribution × factor | $307,466.19. |
| Traditional after-tax balance | pre-tax × (1 − retirement bracket) | $270,570.25. |
| Roth balance (tax-free) | contribution × (1 − current bracket) × factor | $239,823.63. |
| Difference (Traditional − Roth) | traditional after tax − Roth | $30,746.62. |
| Winner | the larger after-tax balance | Traditional wins by $30,746.62. |
| Out of pocket, Traditional per year | contribution × (1 − current bracket) | $5,850.00. |
| Out of pocket, Roth per year | contribution | $7,500.00. |
| Out of pocket, Traditional over 20 years | out of pocket per year × years | $117,000.00. |
| Out of pocket, Roth over 20 years | out of pocket per year × years | $150,000.00. |
| Total tax paid, Traditional | pre-tax − after tax | $36,895.94. |
| Total tax paid, Roth | contribution × current bracket × factor | $67,642.56. |
| Retirement bracket where the two tie | exactly the current bracket | 22.0000% → 22.00%. |
| Current bracket where the two tie | exactly the retirement bracket | 12.0000% → 12.00%. |
| Retirement bracket for a $25,000 Traditional win | bisection on the win | 13.8690% → 13.87%. |
| Contribution for a $50,000 Traditional win | bisection on the win | $12,196.46 → $12,196.46. |
| Years for a $50,000 Traditional win | first whole year the win reaches $50,000 | 26 years. |
| Return for a $40,000 Traditional win | bisection on the win | 9.3699% → 9.37%. |
| Retirement bracket 24% | same model | Traditional $233,674.31, Roth $239,823.63 — Roth wins by $6,149.32. |
| Current 12%, retirement 22% | same model | Traditional $239,823.63, Roth $270,570.25 — Roth wins by $30,746.62. |
| 30 years | same model | Traditional $623,441.19, Roth $552,595.60 — Traditional wins by $70,845.59. |
| Return 5% | same model | Traditional $218,235.30, Roth $193,435.83 — Traditional wins by $24,799.47. |
| Contribution $8,600 (age 50+) | same model | Traditional $310,253.89, Roth $274,997.76 — Traditional wins by $35,256.12. |
| Current bracket 32% | same model | Traditional $270,570.25, Roth $209,077.01 — Traditional wins by $61,493.24. |
Who uses this
- The saver at 22% now expecting 12% in retirement: they learn the traditional wins by $30,746.62 — and they check the 24% retirement branch ($233,674.31) to see where the Roth takes over.
- The early-career saver at 12% now: they learn the Roth wins by $30,746.62 if retirement is 22% — and they check the tie reverse (12.00%) to see the exact boundary.
- The 50-year-old adding the catch-up: they learn $8,600 a year lifts the traditional win to $35,256.12 — and they check the 30-year branch ($70,845.59) to see what time adds.
- The high earner at 32% now: they learn the traditional wins by $61,493.24 — and they check the 0% current-bracket edge ($36,895.94 the other way) to see the full range.
Accuracy & limitations
The math is first-principles: the annuity factor F = ((1 + return)^years − 1) ÷ return; the traditional pre-tax balance is contribution × F, taxed once at the retirement bracket; the Roth is contribution × (1 − current bracket) × F, tax-free after that. The winner depends only on the two brackets, because both sides grow by the same factor — a result you can check by changing the return or the years and watching the winner stay put. What the model cannot do is predict YOUR brackets: it assumes one flat bracket now and one flat bracket in retirement, with no state tax, no Roth income limits, no required minimum distributions, and no employer match. For the 2026 limits, see the 2026 retirement contribution limits; for the 401(k) version, see the 401(k) vs IRA comparison; for the Roth contribution limits, see the guide to calculating your Roth IRA contribution; and for the Roth-vs-traditional guide, see the Roth vs traditional IRA guide. This is a calculator, not financial advice.
Cite this calculatorBright Side Kit. “Traditional vs Roth IRA: Which Wins After Tax? 2026” brightoolbox.com, 2026. Method: annual contributions at year-end (ordinary annuity); annuity factor F = ((1 + return)^years − 1) ÷ return; traditional pre-tax = contribution × F, after tax = pre-tax × (1 − retirement bracket); Roth = contribution × (1 − current bracket) × F, tax-free; out of pocket per year: traditional = contribution × (1 − current bracket), Roth = contribution; total tax paid: traditional = pre-tax − after tax, Roth = contribution × current bracket × F. 2026 IRA limit $7,500 under 50; 50+ catch-up +$1,100 = $8,600. Defaults: $7,500/yr, 20 years, 7%, current 22%, retirement 12% → factor 40.9954923212, traditional pre-tax $307,466.19, after 12% retirement tax $270,570.25, Roth $239,823.63, winner Traditional wins by $30,746.62; out of pocket per year traditional $5,850.00, Roth $7,500.00; over 20 years $117,000.00 vs $150,000.00; total tax paid traditional $36,895.94, Roth $67,642.56. Branches: retirement 24% → traditional $233,674.31, Roth $239,823.63, Roth wins by $6,149.32; current 12%, retirement 22% → traditional $239,823.63, Roth $270,570.25, Roth wins by $30,746.62; 30 years → traditional $623,441.19, Roth $552,595.60, Traditional wins by $70,845.59; return 5% → traditional $218,235.30, Roth $193,435.83, Traditional wins by $24,799.47; contribution $8,600 → traditional $310,253.89, Roth $274,997.76, Traditional wins by $35,256.12; current 32% → traditional $270,570.25, Roth $209,077.01, Traditional wins by $61,493.24. Reverses: retirement bracket where the two tie = 22.00% (exactly the current bracket; forward tie $0.00); current bracket where the two tie = 12.00% (exactly the retirement bracket; forward tie $0.00); retirement bracket for a Traditional win of exactly $25,000 = 13.87% (exact 13.8690%; forward win $24,997.00); contribution for a Traditional win of $50,000 = $12,196.46/yr (exact $12,196.4629; forward win $49,999.99); years for a Traditional win of $50,000 = 26 years (25-yr win $47,436.78; 26-yr win $51,507.35); return for a Traditional win of $40,000 = 9.37% (exact 9.3699%; forward win $40,000.67). Edges: current = retirement = 22% → tie, $0.00 difference (both $239,823.63); retirement 0% → traditional $307,466.19, Roth $239,823.63, Traditional wins by $67,642.56; current 0% → traditional $270,570.25, Roth $307,466.19, Roth wins by $36,895.94; 1 year → traditional $6,600.00, Roth $5,850.00, Traditional wins by $750.00; current = retirement = 37% → tie, $0.00, traditional after-tax $193,703.70.
Bright Side Kit. "Traditional vs Roth IRA: Which Wins After Tax? 2026" https://brightoolbox.com/traditional-ira-vs-roth-ira/ Accessed October 25, 2026.Frequently asked questions
Which is better, a traditional IRA or a Roth IRA?
It depends only on your two tax brackets. At 22% now and 12% in retirement, the traditional wins by $30,746.62 ($270,570.25 after tax against the Roth’s $239,823.63). If your retirement bracket is higher than today’s, the Roth wins instead — at 24% in retirement the Roth wins by $6,149.32.
When do a traditional and a Roth IRA tie?
When the two brackets are equal. The retirement bracket where the two tie is 22.00% — exactly the current bracket — and the current bracket where they tie is 12.00% — exactly the retirement bracket. At 22% and 22% both are $239,823.63; at 37% and 37% both are $193,703.70.
Does the return change which IRA wins?
No. Both sides grow by the same factor — 40.9954923212 at 7% over 20 years — so the return scales both balances equally. At 5% the traditional still wins by $24,799.47; the winner is decided by the brackets alone.
What retirement tax bracket gives a traditional IRA win of $25,000?
13.87%. The retirement bracket for a Traditional win of exactly $25,000 is 13.87% (exact 13.8690%). At the displayed 13.87% the forward win is $24,997.00 — $3 under the $25,000 target, which is rounding.
How much do I need to contribute for a traditional IRA win of $50,000?
$12,196.46 a year. The contribution for a Traditional win of $50,000 is $12,196.46/yr (exact $12,196.4629); the forward win is $49,999.99 — 1¢ under the target, which is rounding. Note that $12,196.46 is above the 2026 IRA limit of $7,500, so it is a what-if, not a plan.
How many years until a traditional IRA wins by $50,000?
26 years. At 25 years the traditional win is $47,436.78; at 26 years it is $51,507.35 — so $50,000 is crossed in year 26.
What return gives a traditional IRA win of $40,000?
9.37%. The return for a Traditional win of $40,000 is 9.37% (exact 9.3699%); the forward win at the displayed return is $40,000.67 — 67¢ over the target, which is rounding.
How much tax do I pay in total with each IRA?
Traditional $36,895.94; Roth $67,642.56. On the defaults the traditional pays $36,895.94 of tax (12% of the $307,466.19 pre-tax balance) and the Roth pays $67,642.56 (22% of every contribution, grown). The traditional also costs $33,000.00 less out of pocket over 20 years.