Roth vs Traditional 401(k) Calculator
Compare how Traditional and Roth 401(k) contributions could affect your taxes today, take-home pay, retirement balance and estimated after-tax value. Instead of assuming one option is better, change the tax rates and other assumptions to see how the comparison changes.
This calculator provides simplified tax estimates based on the assumptions you enter. It does not prepare a tax return or provide individualized tax or investment advice.
Traditional 401(k)
Roth 401(k)
*Assumes qualified Roth distributions. Pre-tax employer matching is taxed separately at the retirement rate.
Under the Assumptions You Entered
Estimated Break-Even Retirement Tax Rate
This is the approximate tax rate on Traditional withdrawals at which the modeled employee-contribution outcomes become equal under the assumptions entered. Change assumptions below to explore sensitivity.
What If Your Retirement Tax Rate Is Different?
Compare outcomes under lower, entered, and higher future tax rate assumptions.
How the Two Accounts Could Grow
Model a Roth / Traditional Split
Divide your employee elective deferrals between Traditional pre-tax and Roth. Combined contributions remain subject to the shared 2026 limit.
Projection Milestones Table
| Milestone | Traditional Gross | Traditional After-Tax | Roth Gross | Roth Qualified | Pre-Tax Match |
|---|
How Much Could a Traditional 401(k) Change Current Income Taxes?
Traditional elective deferrals generally reduce current federal taxable income, while designated Roth contributions are included in current gross income. For example, contributing $10,000 to a Traditional 401(k) with a 24% federal marginal rate and a 5% state rate reduces current income taxes by approximately $2,900.
Crucial Payroll Tax Distinction: Regular Traditional 401(k) elective deferrals generally remain subject to Social Security and Medicare taxes (FICA). Therefore, this calculator does not treat Social Security or Medicare payroll taxes as avoided by making a Traditional pre-tax contribution.
Same Contribution Is Not the Same Take-Home Cost
If a worker contributes $10,000 Traditional and $10,000 Roth, the 401(k) contribution amounts are identical. However, the current take-home-pay effect differs substantially because the Traditional contribution reduces current income taxes while the Roth contribution does not. That is why this calculator provides both Same 401(k) Contribution and Same Take-Home Cost comparison modes:
- Same 401(k) Contribution: Compares equal gross dollars into each account ($10k Trad vs $10k Roth). Roth creates a larger current paycheck cost.
- Same Take-Home Cost: Adjusts the Traditional contribution higher ($10,000 / (1 - 0.20) = $12,500) to keep the current net paycheck impact equal, subject to annual statutory limits.
Traditional vs Roth 401(k): What Changes?
| Feature | Traditional 401(k) | Roth 401(k) |
|---|---|---|
| Employee contribution tax treatment | Generally pre-tax for federal income tax | Included in current taxable income |
| Current income-tax effect | May reduce current taxable income | No comparable current income-tax deduction |
| Social Security / Medicare treatment | Generally still subject to payroll taxes | Generally subject to payroll taxes |
| Investment growth | Tax-deferred | Potentially tax-free when qualified |
| Retirement withdrawals | Generally taxable | Qualified distributions generally tax-free |
| Employee contribution limit | Shared annual limit ($24,500 in 2026) | Shared annual limit ($24,500 in 2026) |
| Income eligibility ceiling | No Roth IRA-style income ceiling | No Roth IRA-style income ceiling |
| Lifetime RMD for original owner | Applicable under current rules | None under current rules (SECURE 2.0) |
How Is a Traditional 401(k) Taxed?
Traditional employee elective deferrals generally are not included in current federal taxable income when contributed. The account grows tax-deferred. Amounts distributed from the pre-tax account generally are taxable when distributed, subject to applicable rules. Traditional elective deferrals generally remain subject to Social Security and Medicare taxes when contributed.
How Is a Roth 401(k) Taxed?
Designated Roth employee contributions are included in current taxable income and maintained in a separate designated Roth account. Qualified distributions generally are excluded from gross income, including the investment earnings portion. A qualified distribution generally requires the applicable five-taxable-year participation period and a qualifying event such as reaching age 59½, disability or death. Nonqualified distributions can have different tax treatment.
Do Roth and Traditional 401(k)s Have Separate Contribution Limits?
No. Traditional pre-tax and designated Roth 401(k) elective deferrals generally share the same annual employee elective-deferral limit. For 2026, the basic employee elective-deferral limit is $24,500. This does not mean you can contribute $24,500 to Traditional plus another $24,500 to Roth. Combined employee elective deferrals cannot exceed the applicable annual employee limit (e.g., $14,500 Traditional + $10,000 Roth = $24,500 total).
What Are the 2026 Catch-Up Limits?
For eligible participants age 50 or older, the standard 2026 catch-up contribution is $8,000 (total employee limit of $32,500). For eligible participants who turn age 60, 61, 62 or 63 during 2026, the higher SECURE 2.0 catch-up limit is $11,250 (total employee limit of $35,750). Participants age 64 and older revert to the standard $8,000 catch-up limit. See the complete 2026 401(k) Contribution Limits guide →
Who May Be Required to Make Catch-Up Contributions as Roth in 2026?
Beginning in 2026, certain participants in plans with Roth features who make catch-up contributions must make those catch-up contributions on a Roth basis when their prior-year wages meet the statutory threshold. For 2026 contributions, the relevant threshold is more than $150,000 of 2025 FICA wages from the plan sponsor.
Important clarification: The $150,000 figure is a prior-year wage test threshold used to determine whether the Roth catch-up rule applies. It is NOT a contribution limit, NOT an income eligibility ceiling for normal Roth 401(k) elective deferrals, and NOT the annual contribution maximum.
Is There an Income Limit for Roth 401(k) Contributions?
A designated Roth 401(k) does not use the income-eligibility phaseout limits that apply to direct Roth IRA contributions. If an employer's plan offers designated Roth contributions, any eligible employee can generally choose Roth elective deferrals regardless of how high their income is, subject to plan terms and statutory contribution limits.
Does a Roth 401(k) Have Required Minimum Distributions?
Designated Roth accounts in 401(k) plans are not subject to required minimum distributions during the original account owner's lifetime under current SECURE 2.0 rules. Beneficiaries can still be subject to distribution requirements. Traditional 401(k) balances remain subject to applicable RMD rules beginning at the statutory RMD age (age 73 under current law).
Do I Still Receive an Employer Match If I Choose Roth 401(k)?
A plan can generally use designated Roth employee contributions when determining an employer matching contribution if its terms provide for matching. Historically, all employer matching contributions were deposited into a pre-tax Traditional account. Current law also permits plans to allow certain fully vested employer matching or nonelective contributions to be designated as Roth contributions. Calculate your exact matching formula with our Employer Match Calculator →
What Factors Affect a Roth vs Traditional 401(k) Comparison?
Key variables include:
- Current federal and state marginal income-tax rates
- Estimated tax rate applied to Traditional withdrawals in retirement
- Amount contributed and whether comparison is equal contribution or equal take-home cost
- Years until retirement and compound investment growth
- Whether current Traditional tax savings are spent or invested in a side account
- Employer contribution tax treatment (pre-tax vs. Roth match)
- Satisfaction of qualified Roth distribution requirements (5-year rule and age 59½)
- Future tax legislation and personal circumstances in retirement
How We Calculate Roth vs Traditional 401(k) (Methodology)
The calculator projects balances year-by-year using standardized compound growth:
- Traditional: Employee contribution → estimated current income-tax reduction → investment growth → modeled retirement withdrawal tax → estimated after-tax retirement value.
- Roth: Employee contribution from after-tax compensation → investment growth → qualified distribution assumption → estimated after-tax retirement value.
- Current Income-Tax Savings: Calculated as Traditional Contribution × (Federal Marginal Rate + Applicable State Rate). Does not include Social Security or Medicare payroll taxes.
- Break-Even Solver: Numerically solves for the retirement tax rate where Traditional after-tax value equals Roth after-tax value using binary search over 0% to 60%.
Limitations
This calculator is an educational scenario-comparison tool. It does NOT predict future tax brackets, state tax legislation, personal deductions, tax credits, filing status shifts, Social Security taxation thresholds, Medicare IRMAA surcharges, pension taxation, or capital gains tax rates.
Frequently Asked Questions: Roth vs Traditional 401(k)
There is no universal answer. The comparison depends on current taxes, future taxes, contribution amounts, investment growth, whether Traditional tax savings are invested, plan rules and other circumstances. Use the calculator to compare assumptions rather than treating either account type as automatically superior.
Traditional employee contributions generally receive current federal income-tax deferral and are generally taxable when distributed. Roth employee contributions are included in current taxable income, while qualified Roth distributions generally can be received tax-free.
Yes. They generally share the same employee elective-deferral limit rather than receiving separate full limits.
The basic combined employee elective-deferral limit for Traditional and Roth 401(k) contributions is $24,500 in 2026, before applicable catch-up contributions.
No. Traditional and Roth elective deferrals generally share the same annual employee limit.
Yes, if the plan offers both. Contributions can generally be split between them, but the combined employee elective deferrals remain subject to the annual limit.
A designated Roth 401(k) does not use the Roth IRA income-eligibility limits. Eligibility still depends on participating in a plan that offers designated Roth contributions.
Certain participants making catch-up contributions in 2026 must make those catch-up contributions on a Roth basis when prior-year FICA wages from the plan sponsor exceeded $150,000. The $150,000 amount is a wage threshold, not a contribution limit.
Designated Roth 401(k) contributions are included in current taxable income and do not receive the same current federal income-tax deferral as Traditional pre-tax elective deferrals.
Generally no. Traditional elective deferrals generally remain subject to Social Security and Medicare taxes even though they are excluded from current federal taxable income.
Qualified distributions from a designated Roth account generally are excluded from gross income. Qualification generally involves the five-taxable-year rule plus a qualifying event such as reaching age 59½, disability or death.
Different tax rules apply. A nonqualified distribution can include a taxable earnings portion and may be subject to other rules depending on the circumstances.
Under current law, designated Roth 401(k) accounts are not subject to required minimum distributions during the original owner's lifetime. Beneficiary distribution rules can still apply.
Traditional 401(k) accounts generally remain subject to required minimum distribution rules, subject to applicable age, employment and ownership rules.
For this simplified comparison, the calculator asks for an estimated marginal income-tax rate for the current contribution effect and a user-selected rate to apply to Traditional withdrawals in retirement. It does not calculate a complete tax return.
Under simplified equal-cost assumptions, similar current and future tax rates can produce similar modeled employee-contribution economics, but plan rules and other taxes can still change the result.
It is the modeled future tax rate on Traditional withdrawals at which the calculator's after-tax outcomes become approximately equal under the entered assumptions.
The same dollar contribution to Roth and Traditional accounts does not generally create the same current paycheck cost because the Traditional contribution may reduce current income taxes. Equal take-home-cost mode adjusts for that difference.
A plan may match Roth elective deferrals just as it matches Traditional elective deferrals if its terms provide for matching. The tax character of the employer contribution depends on the plan and elections available.
Current law permits plans to allow certain fully vested matching or nonelective employer contributions to be designated as Roth. Not every plan offers this feature.
Yes, if the plan permits both. Use the split-strategy tool to model different percentages without treating any particular split as a recommendation.
No. It is an educational scenario-comparison tool using simplified tax assumptions. Actual tax outcomes can differ materially.
Primary IRS & Regulatory Sources
- Internal Revenue Service: Topic 424 – 401(k) Plans
- Internal Revenue Service: Designated Roth Accounts in 401(k), 403(b), or 457(b) Plans
- Internal Revenue Service: Notice 2025-67 – 2026 Cost-of-Living Adjustments for Retirement Plans
- Internal Revenue Service: Retirement Topics – Catch-Up Contributions
- Internal Revenue Service: Retirement Topics – Required Minimum Distributions (RMDs)
- Internal Revenue Service: Notice 2024-2 – Miscellaneous SECURE 2.0 Guidance (Roth Matching & Nonelective Contributions)
Continue Comparing Your 401(k)
Compare the Tax Assumptions That Matter
Change your current tax rate, retirement tax-rate assumption, contribution amount and comparison method to see how the modeled Roth and Traditional outcomes change.
Return to Calculator ↑Results are estimates based on simplified assumptions and should not be treated as a recommendation to choose Roth or Traditional contributions.