Roth vs Traditional worksheet

1. Roth minus traditional (after tax): -$41,534.91

1. 2026 401(k) limit

   $\text{limit}$$=\mathrm{\$24,500.00}$

2. Find F, what $1 saved each year grows to over 20 years at 7%. Both accounts grow by this same amount

   $\frac{{\left(1+0.07\right)}^{20}-1}{0.07}$$=40.995492$

3. Roth: you already paid tax on the money, so it grows and comes out tax-free

   $\mathrm{\$7,000.00}\times 40.995492$$=\mathrm{\$286,968.45}$

4. Traditional: money goes in before tax, so the same take-home cost buys a larger contribution. Divide by (1 − 24%)

   $\frac{\mathrm{\$7,000.00}}{\left(1-0.24\right)}$$=\mathrm{\$9,210.53}$

5. Grow the traditional contribution to retirement, before any tax

   $\mathrm{\$9,210.53}\times 40.995492$$=\mathrm{\$377,590.06}$

6. Take off the tax on withdrawals, at your 13% retirement rate

   $\mathrm{\$377,590.06}\times \left(1-0.13\right)$$=\mathrm{\$328,503.35}$

7. Subtract to compare what each leaves you after tax: Roth minus traditional

   $\mathrm{\$286,968.45}-\mathrm{\$328,503.35}$$=\mathrm{-\$41,534.91}$

8. Break-even: the retirement tax rate that makes the two equal

   $\frac{\mathrm{\$377,590.06}+\mathrm{\$0.00}-\mathrm{\$286,968.45}}{\mathrm{\$377,590.06}}\times 100$$=\mathrm{24\%}$

2. Roth minus traditional (after tax): -$22,478.72

1. 2026 IRA limit

   $\text{limit}$$=\mathrm{\$7,500.00}$

2. Find F, what $1 saved each year grows to over 22 years at 5%. Both accounts grow by this same amount

   $\frac{{\left(1+0.05\right)}^{22}-1}{0.05}$$=38.505214$

3. Roth: you already paid tax on the money, so it grows and comes out tax-free

   $\mathrm{\$5,400.00}\times 38.505214$$=\mathrm{\$207,928.16}$

4. Traditional: money goes in before tax, so the same take-home cost buys a larger contribution. Divide by (1 − 26%)

   $\frac{\mathrm{\$5,400.00}}{\left(1-0.26\right)}$$=\mathrm{\$7,297.30}$

5. Grow the traditional contribution to retirement, before any tax

   $\mathrm{\$7,297.30}\times 38.505214$$=\mathrm{\$280,984.00}$

6. Take off the tax on withdrawals, at your 18% retirement rate

   $\mathrm{\$280,984.00}\times \left(1-0.18\right)$$=\mathrm{\$230,406.88}$

7. Subtract to compare what each leaves you after tax: Roth minus traditional

   $\mathrm{\$207,928.16}-\mathrm{\$230,406.88}$$=\mathrm{-\$22,478.72}$

8. Break-even: the retirement tax rate that makes the two equal

   $\frac{\mathrm{\$280,984.00}+\mathrm{\$0.00}-\mathrm{\$207,928.16}}{\mathrm{\$280,984.00}}\times 100$$=\mathrm{26\%}$

3. Roth minus traditional (after tax): -$45,052.43

1. 2026 401(k) limit

   $\text{limit}$$=\mathrm{\$24,500.00}$

2. Find F, what $1 saved each year grows to over 34 years at 6%. Both accounts grow by this same amount

   $\frac{{\left(1+0.06\right)}^{34}-1}{0.06}$$=104.183755$

3. Roth: you already paid tax on the money, so it grows and comes out tax-free

   $\mathrm{\$4,000.00}\times 104.183755$$=\mathrm{\$416,735.02}$

4. Traditional: money goes in before tax, so the same take-home cost buys a larger contribution. Divide by (1 − 26%)

   $\frac{\mathrm{\$4,000.00}}{\left(1-0.26\right)}$$=\mathrm{\$5,405.41}$

5. Grow the traditional contribution to retirement, before any tax

   $\mathrm{\$5,405.41}\times 104.183755$$=\mathrm{\$563,155.43}$

6. Take off the tax on withdrawals, at your 18% retirement rate

   $\mathrm{\$563,155.43}\times \left(1-0.18\right)$$=\mathrm{\$461,787.45}$

7. Subtract to compare what each leaves you after tax: Roth minus traditional

   $\mathrm{\$416,735.02}-\mathrm{\$461,787.45}$$=\mathrm{-\$45,052.43}$

8. Break-even: the retirement tax rate that makes the two equal

   $\frac{\mathrm{\$563,155.43}+\mathrm{\$0.00}-\mathrm{\$416,735.02}}{\mathrm{\$563,155.43}}\times 100$$=\mathrm{26\%}$

4. Roth minus traditional (after tax): $57,651.51

1. 2026 401(k) limit

   $\text{limit}$$=\mathrm{\$24,500.00}$

2. Find F, what $1 saved each year grows to over 27 years at 8%. Both accounts grow by this same amount

   $\frac{{\left(1+0.08\right)}^{27}-1}{0.08}$$=87.350768$

3. Roth: you already paid tax on the money, so it grows and comes out tax-free

   $\mathrm{\$5,500.00}\times 87.350768$$=\mathrm{\$480,429.23}$

4. Grow the traditional contribution to retirement, before any tax

   $\mathrm{\$5,500.00}\times 87.350768$$=\mathrm{\$480,429.23}$

5. Take off the tax on withdrawals, at your 12% retirement rate

   $\mathrm{\$480,429.23}\times \left(1-0.12\right)$$=\mathrm{\$422,777.72}$

6. Subtract to compare what each leaves you after tax: Roth minus traditional

   $\mathrm{\$480,429.23}-\mathrm{\$422,777.72}$$=\mathrm{\$57,651.51}$

5. Roth minus traditional (after tax): $42,753.87

1. 2026 IRA limit

   $\text{limit}$$=\mathrm{\$7,500.00}$

2. Find F, what $1 saved each year grows to over 22 years at 9%. Both accounts grow by this same amount

   $\frac{{\left(1+0.09\right)}^{22}-1}{0.09}$$=62.873338$

3. Roth: you already paid tax on the money, so it grows and comes out tax-free

   $\mathrm{\$4,250.00}\times 62.873338$$=\mathrm{\$267,211.69}$

4. Grow the traditional contribution to retirement, before any tax

   $\mathrm{\$4,250.00}\times 62.873338$$=\mathrm{\$267,211.69}$

5. Take off the tax on withdrawals, at your 16% retirement rate

   $\mathrm{\$267,211.69}\times \left(1-0.16\right)$$=\mathrm{\$224,457.82}$

6. Subtract to compare what each leaves you after tax: Roth minus traditional

   $\mathrm{\$267,211.69}-\mathrm{\$224,457.82}$$=\mathrm{\$42,753.87}$

6. Roth minus traditional (after tax): -$10,609.88

1. 2026 IRA limit

   $\text{limit}$$=\mathrm{\$7,500.00}$

2. Find F, what $1 saved each year grows to over 22 years at 9%. Both accounts grow by this same amount

   $\frac{{\left(1+0.09\right)}^{22}-1}{0.09}$$=62.873338$

3. Roth: you already paid tax on the money, so it grows and comes out tax-free

   $\mathrm{\$4,500.00}\times 62.873338$$=\mathrm{\$282,930.02}$

4. Traditional: money goes in before tax, so the same take-home cost buys a larger contribution. Divide by (1 − 20%)

   $\frac{\mathrm{\$4,500.00}}{\left(1-0.2\right)}$$=\mathrm{\$5,625.00}$

5. Grow the traditional contribution to retirement, before any tax

   $\mathrm{\$5,625.00}\times 62.873338$$=\mathrm{\$353,662.53}$

6. Take off the tax on withdrawals, at your 17% retirement rate

   $\mathrm{\$353,662.53}\times \left(1-0.17\right)$$=\mathrm{\$293,539.90}$

7. Subtract to compare what each leaves you after tax: Roth minus traditional

   $\mathrm{\$282,930.02}-\mathrm{\$293,539.90}$$=\mathrm{-\$10,609.88}$

8. Break-even: the retirement tax rate that makes the two equal

   $\frac{\mathrm{\$353,662.53}+\mathrm{\$0.00}-\mathrm{\$282,930.02}}{\mathrm{\$353,662.53}}\times 100$$=\mathrm{20\%}$

7. Roth minus traditional (after tax): $14,980.10

1. 2026 401(k) limit

   $\text{limit}$$=\mathrm{\$24,500.00}$

2. Find F, what $1 saved each year grows to over 18 years at 8%. Both accounts grow by this same amount

   $\frac{{\left(1+0.08\right)}^{18}-1}{0.08}$$=37.450244$

3. Roth: you already paid tax on the money, so it grows and comes out tax-free

   $\mathrm{\$4,000.00}\times 37.450244$$=\mathrm{\$149,800.97}$

4. Grow the traditional contribution to retirement, before any tax

   $\mathrm{\$4,000.00}\times 37.450244$$=\mathrm{\$149,800.97}$

5. Take off the tax on withdrawals, at your 10% retirement rate

   $\mathrm{\$149,800.97}\times \left(1-0.1\right)$$=\mathrm{\$134,820.88}$

6. Subtract to compare what each leaves you after tax: Roth minus traditional

   $\mathrm{\$149,800.97}-\mathrm{\$134,820.88}$$=\mathrm{\$14,980.10}$

8. Roth minus traditional (after tax): -$24,831.51

1. 2026 401(k) limit

   $\text{limit}$$=\mathrm{\$24,500.00}$

2. Find F, what $1 saved each year grows to over 24 years at 7%. Both accounts grow by this same amount

   $\frac{{\left(1+0.07\right)}^{24}-1}{0.07}$$=58.176671$

3. Roth: you already paid tax on the money, so it grows and comes out tax-free

   $\mathrm{\$5,000.00}\times 58.176671$$=\mathrm{\$290,883.35}$

4. Traditional: money goes in before tax, so the same take-home cost buys a larger contribution. Divide by (1 − 18%)

   $\frac{\mathrm{\$5,000.00}}{\left(1-0.18\right)}$$=\mathrm{\$6,097.56}$

5. Grow the traditional contribution to retirement, before any tax

   $\mathrm{\$6,097.56}\times 58.176671$$=\mathrm{\$354,735.80}$

6. Take off the tax on withdrawals, at your 11% retirement rate

   $\mathrm{\$354,735.80}\times \left(1-0.11\right)$$=\mathrm{\$315,714.86}$

7. Subtract to compare what each leaves you after tax: Roth minus traditional

   $\mathrm{\$290,883.35}-\mathrm{\$315,714.86}$$=\mathrm{-\$24,831.51}$

8. Break-even: the retirement tax rate that makes the two equal

   $\frac{\mathrm{\$354,735.80}+\mathrm{\$0.00}-\mathrm{\$290,883.35}}{\mathrm{\$354,735.80}}\times 100$$=\mathrm{18\%}$

9. Roth minus traditional (after tax): -$15,187.30

1. 2026 401(k) limit

   $\text{limit}$$=\mathrm{\$24,500.00}$

2. Find F, what $1 saved each year grows to over 22 years at 6%. Both accounts grow by this same amount

   $\frac{{\left(1+0.06\right)}^{22}-1}{0.06}$$=43.39229$

3. Roth: you already paid tax on the money, so it grows and comes out tax-free

   $\mathrm{\$4,000.00}\times 43.39229$$=\mathrm{\$173,569.16}$

4. Traditional: money goes in before tax, so the same take-home cost buys a larger contribution. Divide by (1 − 20%)

   $\frac{\mathrm{\$4,000.00}}{\left(1-0.2\right)}$$=\mathrm{\$5,000.00}$

5. Grow the traditional contribution to retirement, before any tax

   $\mathrm{\$5,000.00}\times 43.39229$$=\mathrm{\$216,961.45}$

6. Take off the tax on withdrawals, at your 13% retirement rate

   $\mathrm{\$216,961.45}\times \left(1-0.13\right)$$=\mathrm{\$188,756.46}$

7. Subtract to compare what each leaves you after tax: Roth minus traditional

   $\mathrm{\$173,569.16}-\mathrm{\$188,756.46}$$=\mathrm{-\$15,187.30}$

8. Break-even: the retirement tax rate that makes the two equal

   $\frac{\mathrm{\$216,961.45}+\mathrm{\$0.00}-\mathrm{\$173,569.16}}{\mathrm{\$216,961.45}}\times 100$$=\mathrm{20\%}$

10. Roth minus traditional (after tax): -$12,136.03

1. 2026 401(k) limit

   $\text{limit}$$=\mathrm{\$24,500.00}$

2. Find F, what $1 saved each year grows to over 19 years at 7%. Both accounts grow by this same amount

   $\frac{{\left(1+0.07\right)}^{19}-1}{0.07}$$=37.378965$

3. Roth: you already paid tax on the money, so it grows and comes out tax-free

   $\mathrm{\$5,000.00}\times 37.378965$$=\mathrm{\$186,894.82}$

4. Traditional: money goes in before tax, so the same take-home cost buys a larger contribution. Divide by (1 − 23%)

   $\frac{\mathrm{\$5,000.00}}{\left(1-0.23\right)}$$=\mathrm{\$6,493.51}$

5. Grow the traditional contribution to retirement, before any tax

   $\mathrm{\$6,493.51}\times 37.378965$$=\mathrm{\$242,720.55}$

6. Take off the tax on withdrawals, at your 18% retirement rate

   $\mathrm{\$242,720.55}\times \left(1-0.18\right)$$=\mathrm{\$199,030.85}$

7. Subtract to compare what each leaves you after tax: Roth minus traditional

   $\mathrm{\$186,894.82}-\mathrm{\$199,030.85}$$=\mathrm{-\$12,136.03}$

8. Break-even: the retirement tax rate that makes the two equal

   $\frac{\mathrm{\$242,720.55}+\mathrm{\$0.00}-\mathrm{\$186,894.82}}{\mathrm{\$242,720.55}}\times 100$$=\mathrm{23\%}$