Roth or Traditional 401(k)?
Roth or traditional 401(k): which leaves more after tax at the same cost to your paycheck? Every piece below can be linked to, so it opens in a window on your reader's screen, current as of the record. No form to fill in.
2026 law · Reviewed September 7, 2026 · The full page, with methodology and sources · the terms · All tools
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The yearly contribution, the two tax rates, the years, and the return in; the after-tax result of each account, the difference, and the break-even rate out. In a frame it carries no cookies, no tracking, and a visible link back to the methodology. Your site has to allow frames; most do. The link that opens it in a small window is on the professionals page.
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- In plain words.
- A traditional contribution skips tax today and pays it when the money comes out. A Roth contribution pays tax today and skips it later. If both cost you the same in take-home pay, they grow the same way, and the only difference is which tax rate applies. This tool grows both at the return and years you choose, taxes each at its rate, and shows what is left.
- Why it matters.
- Most plans now offer both, and the choice is made on every paycheck for decades. The answer is not which account is better but which rate is higher, yours today or yours in retirement, and that is a guess worth making with the arithmetic in view.
- An example.
- $10,000 a year at a 22% rate today and 12% in retirement, growing 25 years at 6%: the traditional account leaves about $37,768 after tax and the Roth, at the same take-home cost, about $33,477. The traditional account is ahead by about $4,292, and the two would tie at a 22% rate in retirement.
- Where it stops.
- Both rates are guesses, and the one in retirement is the guess that decides it. The tool uses one flat rate on the withdrawals, one return for both accounts, and no state tax difference between now and later. It does not invest the tax a traditional saver defers, and it does not know what the law will say in thirty years.
The facts
Six quotable sentences on Roth against traditional.
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- A traditional 401(k) dollar is taxed when it comes out, at whatever rate applies then. A Roth dollar is taxed before it goes in, at today's rate, and never again. Same return, same years, same plan limit: the only difference is which rate applies.
- Held to the same cost in take-home pay, the two accounts end equal when the rate in retirement equals the rate today. A lower rate later favors the traditional account; a higher rate later favors the Roth. The return and the years scale both alike and do not change the answer.
- Example: $10,000 a year at 22% today and 12% in retirement, 25 years at 6%. The traditional account leaves about $37,768 after tax. The Roth, costing the same $7,800 of take-home, leaves about $33,477. The traditional account is ahead by about $4,292.
- The rate in retirement is often lower than the marginal rate today, because withdrawals fill the standard deduction and the low brackets first. A pension, a large balance, or required distributions can push it up. The federal brackets for 2026 run from 10% to 37%, and state tax sits on top.
- The plan limit is the same for both accounts, $24,500 for 2026 before any catch-up. A full Roth contribution therefore shelters more after-tax money than a full traditional one, and it costs more take-home in the year it is made, by the tax the traditional saver defers.
- The rate in retirement is a guess about a return filed decades from now. Splitting contributions between the two accounts hedges the guess, and most plans that offer a Roth option allow both in the same year.
By the rate in retirement
How the answer moves with the one assumption that decides it.
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| Rate in retirement | Traditional, after tax | Roth, after tax | Which leaves more |
|---|---|---|---|
| 12% | $37,768 | $33,477 | Traditional, by $4,292 |
| 22% | $33,477 | $33,477 | They tie |
| 24% | $32,618 | $33,477 | Roth, by $858 |
| 32% | $29,185 | $33,477 | Roth, by $4,292 |
Cite and link.
The clean address, a citation generated from the record so it can never carry a stale review date, and an address for every section so you can point a reader at the exact table or method.
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- Link
- https://consideratecapital.com/tools/roth-or-traditional-401k
- Citation
- Considerate Capital, "Roth or Traditional 401(k)?," reviewed September 7, 2026, https://consideratecapital.com/tools/roth-or-traditional-401k.
Link to a section
- The calculator https://consideratecapital.com/tools/roth-or-traditional-401k#calculator
- The facts https://consideratecapital.com/tools/roth-or-traditional-401k#facts
- By the rate in retirement https://consideratecapital.com/tools/roth-or-traditional-401k#key-numbers
- How the comparison works https://consideratecapital.com/tools/roth-or-traditional-401k#how-it-works
- Methodology https://consideratecapital.com/tools/roth-or-traditional-401k#methodology
- Revision history https://consideratecapital.com/tools/roth-or-traditional-401k#revision-history
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