Compare tax savings now vs. in retirement. See which IRA wins for your situation.
Your Details
22%
22%
$6,000
25 yrs
7%
Verdict
$0
Roth IRA
$0
Tax paid now (at contribution)
$0
Tax-free at withdrawal
Traditional IRA
$0
Tax saved now (deducted)
$0
Taxed at withdrawal
Factor
Roth IRA
Traditional IRA
Why the Winner Wins
Open Your IRA Today
Betterment
Automated Roth & Traditional IRAs with smart tax-loss harvesting.
Up to $1,250/refund
Wealthfront
Free IRA account with automatic portfolio rebalancing.
$100 per client
Fidelity
No-account fees, large fund selection, Roth & Traditional IRAs.
Top-rated IRA
Vanguard
Low-cost index fund IRAs for buy-and-hold investors.
0.03% ETF fees
Frequently Asked Questions
A Traditional IRA gives you a tax deduction now — you pay taxes when you withdraw money in retirement. A Roth IRA requires you to pay taxes now, but all withdrawals in retirement are completely tax-free, including gains.
Roth IRA is almost always better in this scenario. You pay your lower current tax rate now, then withdraw tax-free when you're in a higher bracket. This is why young workers and those expecting large pensions or Social Security often favor Roth.
The limit is $7,000 per year (2026), or $8,000 if you're age 50 or older. This limit applies to all IRAs combined — you can't contribute $7,000 to both a Roth and Traditional IRA in the same year.
Traditional IRAs require RMDs starting at age 73 (as of 2023 SECURE 2.0 Act). Roth IRAs have NO RMDs during your lifetime — you can let money grow indefinitely and pass it to heirs tax-free.
Yes — this is called a Roth conversion. You pay income tax on the converted amount in the year of conversion. It's a powerful strategy if you expect higher future tax rates, need to reduce future RMDs, or want to leave tax-free inheritance to heirs.
Roth IRA contributions are reduced or eliminated at certain income thresholds. For 2026, single filers with MAGI above $161,000 see reduced contributions (phase-out starting at $150,000); those above $176,000 cannot contribute. Married filers phase out between $240,000–$260,000. Backdoor Roth IRA strategies exist to get around these limits.
This calculator is for educational purposes only and does not constitute financial or tax advice. Consult a qualified tax professional before making IRA contribution decisions. Tax rates and contribution limits subject to change.