2026 Roth vs Traditional IRA Calculator

Compare two hypothetical ways to invest the same monthly take-home budget under US federal 2026 assumptions. Both alternatives invest unused budget in a separate taxable account, so contribution caps do not leave one side with unexplained extra cash.

Enter your values to see an estimate. Enter 0 for amounts that do not apply.

How this calculator works

Roth monthly contribution = min(eligible annual limit / 12, monthly budget). Traditional contribution = min(eligible annual limit / 12, budget / (1 − current tax rate)). The traditional deduction is assumed fully available and its tax savings immediately reinvested. Each side invests budget minus its net IRA contribution cost in a taxable side account at month end. Both accounts use the same effective annual return. At the horizon, traditional IRA withdrawals are taxed at your retirement rate; only positive side-account gains are taxed at your entered gains rate. Roth withdrawals are assumed qualified.

Worked example

With a 400 monthly budget, a 7,500 eligible annual limit, 20% current and retirement tax rates, 0% return and one year, Roth receives 400 per month and traditional receives 500. The 6,000 traditional balance becomes 4,800 after the assumed 1,200 withdrawal tax, matching the 4,800 Roth balance.

Assumptions and limits

US federal 2026, USD; no starting balances. You confirm one eligible annual IRA limit for both alternatives, no more than 8,600 (including the age-50 catch-up). Full traditional deductibility and qualified Roth distributions are assumptions, not eligibility findings. The current tax benefit is available monthly without refund delay. Side accounts have no annual dividend or realized-gain tax drag; terminal positive gains alone are taxed, and losses give no tax credit. The current-year cap and all rates remain fixed over the horizon. No income phaseouts, basis/pro-rata rules, conversions, early-withdrawal penalties, required distributions, state taxes or changing future law are modeled. A positive advantage is a modeled difference, not a recommendation.

How to choose your inputs

Use the same monthly take-home budget for both alternatives, then enter the effective annual return, years, current and retirement federal income tax rates, terminal capital gains tax rate and your independently confirmed eligible annual IRA contribution limit. This USD comparison uses US federal 2026 rules as a reference. Its $8,600 maximum input includes the age-50 catch-up; the general limit is $7,500 and your available room may be lower. Confirm contribution eligibility and full Traditional deductibility independently; the calculator does not evaluate either.

How to interpret your result

Traditional deposits equal the monthly budget divided by one minus the current tax rate, capped at one-twelfth of your annual limit; Roth deposits use the budget subject to the same cap. For each alternative, unused take-home budget goes into a taxable side account. All deposits occur at month-end and share the equivalent monthly investment return. Traditional tax savings already fund its larger deposits. The comparison assumes fully deductible Traditional contributions and qualified Roth withdrawals, taxes the entire Traditional ending balance at the entered retirement rate, and taxes only positive terminal side-account gains at your capital gains rate. Side accounts have no annual tax drag or loss tax benefit. There are no initial balances, separate fees, required distributions, penalties or state taxes. Fixed caps and rates do not forecast later law. This is educational information, not personalized tax advice.

Primary references

This educational estimate uses your inputs. It is not individualized financial, tax, insurance, or investment advice, a lender offer, approval decision, or a promise of future results.

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