Use this calculator to compare the benefits of a Roth IRA versus a Traditional IRA based on your current and expected future tax rates, contribution amounts, and growth rates.
Roth IRAs allow you to pay taxes on your contributions now, but withdrawals in retirement are tax-free. Traditional IRAs let you defer taxes until retirement, but withdrawals are taxed at your retirement tax rate.
Make informed decisions about your retirement savings strategy by understanding the long-term implications of each type of IRA.
For more information on IRAs, visit the IRS Roth IRA page.
The calculator will show you the final value of both a Roth IRA and a Traditional IRA after accounting for taxes. The Roth IRA value is tax-free upon withdrawal, while the Traditional IRA value is adjusted for taxes based on your retirement tax rate.
The results will help you understand which IRA option may be more beneficial for your retirement savings strategy.
Choosing a Roth IRA can be advantageous if you expect your tax rate to be higher in retirement than it is now. By paying taxes on your contributions upfront, you can potentially save on taxes in the long run.
A Traditional IRA may be more beneficial if you expect your tax rate to be lower in retirement. It allows you to defer taxes until you withdraw funds, which can be advantageous if you are currently in a higher tax bracket.
For more detailed information, you can refer to the IRS IRA Deduction Limits.