Traditional vs. Roth IRA From Age 40 to 55
Based on default contribution and tax-rate assumptions. Use the calculator below to adjust any input.
Better Option After Tax
Traditional IRA
By $4,036 at age 55
Example
Contributing $7,000 per year from age 40 to 55, a Traditional IRA would be worth approximately $196,421 after paying 15% tax at withdrawal, versus $192,385 tax-free in a Roth IRA — making the Traditional IRA the better choice by $4,036 under these assumptions.
Traditional IRA (after tax)
$196,421
Roth IRA (after tax)
$192,385
Traditional (pre-tax)
$231,084
Years to Grow
15 yrs
After-tax balance at retirement, by account type
What is an IRA?
An Individual Retirement Arrangement (IRA) is a tax-advantaged account for retirement savings. A Traditional IRA is funded with pre-tax dollars and reduces your taxable income today, but every withdrawal in retirement is taxed as ordinary income. A Roth IRA flips this: contributions use after-tax dollars with no upfront deduction, but qualified withdrawals — including all growth — are completely tax-free.
Because the two accounts tax your money at different points in time, which one leaves you with more spendable money in retirement depends almost entirely on whether your tax rate is higher today or will be higher after you retire.
Traditional (pre-tax) vs. Roth (after-tax) balance, by age
Year-by-Year Balance Schedule
| Age | Traditional (pre-tax) | Roth (after-tax) |
|---|---|---|
| 40 | $20,000 | $20,000 |
| 41 | $28,400 | $26,860 |
| 42 | $37,388 | $34,200 |
| 43 | $47,005 | $42,054 |
| 44 | $57,296 | $50,458 |
| 45 | $68,306 | $59,450 |
| 46 | $80,088 | $69,072 |
| 47 | $92,694 | $79,367 |
| 48 | $106,182 | $90,382 |
| 49 | $120,615 | $102,169 |
| 50 | $136,058 | $114,781 |
| 51 | $152,582 | $128,275 |
| 52 | $170,263 | $142,715 |
| 53 | $189,181 | $158,165 |
| 54 | $209,424 | $174,696 |
| 55 | $231,084 | $192,385 |
How Is the Comparison Calculated?
Both scenarios start from the same pre-tax income available to save. The Traditional IRA invests the full pre-tax contribution and grows it tax-deferred, then taxes the entire balance at your expected retirement tax rate on withdrawal. The Roth IRA first pays tax on the contribution at today's rate, then invests the smaller after-tax amount, which grows completely tax-free with no further tax owed.
Why the Tax-Rate Comparison Matters Most
When your current and retirement tax rates are identical, a Traditional and Roth IRA produce mathematically equivalent after-tax outcomes. The moment those rates diverge, the account taxed at the lower rate wins — which is why this calculator asks for both a current and a retirement marginal tax rate rather than just one.
Why Younger Savers Often Lean Roth
Early-career workers are often in a lower tax bracket than they expect to be later, making the Roth's "pay tax now, grow tax-free forever" tradeoff attractive. Higher earners closer to peak income, by contrast, often benefit more from the Traditional IRA's upfront deduction.
Contribution Limits Are Shared
The IRS treats Traditional and Roth IRA contributions as sharing one combined annual limit — $7,500 under age 50, or $8,600 at 50 and older for 2026 — across both account types, not $7,500 each.
Example — Your Current Inputs
Contributing $7,000 per year from age 40 to 55, a Traditional IRA would be worth approximately $196,421 after paying 15% tax at withdrawal, versus $192,385 tax-free in a Roth IRA — making the Traditional IRA the better choice by $4,036 under these assumptions.
Additional Example — Equal Tax Rates
A saver contributing $6,000 a year for 30 years at a 7% return, facing a 24% tax rate both now and in retirement, ends up with essentially the same after-tax result from either account — around $340,000 — illustrating that the account type only matters when tax rates change between now and retirement.
About These Parameters
- Current Age & Retirement Age
- These set how many years of contributions and compounding both scenarios get before the comparison is made.
- Annual Contribution (Pre-Tax)
- Entered as a pre-tax dollar amount, capped at the shared IRS annual limit. The Roth scenario automatically reduces this by your current tax rate to reflect that Roth contributions come from already-taxed income.
- Current & Retirement Marginal Tax Rate
- The single biggest driver of which account wins. Even small differences between these two rates can swing tens of thousands of dollars in the comparison over a multi-decade horizon.
Frequently Asked Questions
Can I contribute to both a Traditional and a Roth IRA?
Yes, but your combined contributions across both accounts can't exceed the shared annual IRS limit. Many savers split contributions between the two to hedge against uncertainty about future tax rates.
Which one should I choose if I'm not sure about future tax rates?
Splitting contributions between both account types is a common way to diversify tax treatment, so you have flexibility to draw from whichever account is more tax-advantageous once your actual retirement tax situation becomes clear.
Does this account for required minimum distributions?
No — this calculator only compares accumulated after-tax value at a single retirement date. Traditional IRAs are subject to required minimum distributions starting at age 73, while Roth IRAs are not, which can matter for longer-term estate planning.