401(k) & Roth IRA Calculator
Compare traditional 401(k) and Roth IRA contributions side by side. Project tax-deferred vs. tax-free growth, estimate employer match impact, and find the breakeven tax rate to decide which account wins.
Quick Presets
Age & Current Balances
Contributions
Employer Match
Assumptions
What Is the 401(k) & Roth IRA Calculator?
This calculator projects the future value of both a traditional 401(k) and a Roth IRA simultaneously, using compound growth formulas that account for your current balance, annual contributions, employer match, and the tax treatment of each account. It then computes the breakeven tax rate — the retirement tax rate at which both accounts produce identical after-tax wealth — so you can make a data-driven choice rather than guessing.
- ›Side-by-side projection — see both account balances at retirement, every 5 years, and in today's dollars (inflation-adjusted).
- ›Employer match maximization — the calculator shows your employer match as a separate line, quantifying exactly how much free money you're receiving.
- ›Breakeven tax rate — the single most useful number for the Roth vs. Traditional decision, eliminating guesswork.
- ›2024 contribution limits — limits auto-flag if your inputs exceed IRS caps ($23,000 for 401k, $7,000 for IRA; catch-up for age 50+).
- ›Preset scenarios — Early Career, Mid Career, and High Earner presets load realistic examples instantly.
Formula
Future Value of Contributions (each account)
FV = P × [(1 + r)ⁿ − 1] / r + B₀ × (1 + r)ⁿ
Employer Match Value
Match = min(contribution%, matchLimit%) × salary × matchRate%
Breakeven Tax Rate
τ* = 1 − (1 − τ_now) × (Traditional FV / Roth FV after-tax)
After-Tax Values
Traditional after-tax = FV_traditional × (1 − τ_retirement)
Roth after-tax = FV_roth (already tax-free)
| Parameter | Name | Description |
|---|---|---|
| P | Annual contribution | Dollars contributed each year to the account |
| B₀ | Current balance | Existing account balance at start of projection |
| r | Annual return rate | Expected average annual investment return (decimal) |
| n | Years to retirement | Retirement age minus current age |
| τ_now | Current tax rate | Your marginal federal income tax rate today |
| τ_ret | Retirement tax rate | Expected marginal rate in retirement |
| τ* | Breakeven tax rate | Retirement rate at which both accounts produce equal after-tax wealth |
| Match | Employer match | Free money from your employer — always contribute at least enough to capture this |
How to Use
- 1Enter your age: Input your current age and your target retirement age. The difference becomes the projection horizon.
- 2Enter current balances: Separate fields for your existing traditional 401(k) balance and existing Roth IRA balance. Leave at 0 if starting fresh.
- 3Set contributions & split: Enter total annual contribution amount, then use the split slider to allocate between 401(k) and Roth IRA.
- 4Add employer match: Enter your employer's match percentage and the salary percentage cap. Example: 100% match up to 6% of salary.
- 5Set tax rates: Enter your current marginal tax bracket and your best estimate of your retirement tax rate. The breakeven rate tells you if your estimate matters.
- 6Choose a preset or click Calculate: Presets load Early Career, Mid Career, and High Earner scenarios. Then press Calculate to see projections.
- 7Read the breakeven rate: If your expected retirement rate is above the breakeven, choose Roth. If below, choose Traditional. At breakeven, it does not matter.
Example Calculation
Mid-career example: age 40, retiring at 65, $50,000 in 401(k), contributing $15,000/year
Inputs: Age 40 → 65 = 25 years, return 7%, current tax 24%, retirement tax 20%
401(k) contributions FV = $15,000 × [(1.07²⁵ − 1) / 0.07] = $948,978
Existing $50,000 FV = $50,000 × 1.07²⁵ = $271,372
Total 401(k) at retirement = $1,220,350
After-tax (20% rate) = $1,220,350 × 0.80 = $976,280
Roth: same gross contributions but paid with after-tax dollars
After-tax contribution = $15,000 × (1 − 0.24) = $11,400/yr
Roth FV (tax-free) = $11,400 × [(1.07²⁵ − 1) / 0.07] = $721,224
Breakeven tax rate ≈ 24% — if retirement rate < 24%, Traditional wins
Key insight from this example
At a 20% retirement rate the traditional 401(k) delivers $976,280 after tax vs. $721,224 for Roth — a $255,056 advantage. Roth only wins if your retirement rate exceeds 24%. Many mid-career workers expect lower income in retirement, making traditional contributions the better default here.
Understanding 401(k) & Roth IRA
Financial Disclaimer
This calculator is for educational and planning purposes only. It does not constitute financial advice. Consult a qualified financial advisor before making investment or retirement decisions. Tax rules and contribution limits change annually; verify current limits at irs.gov.
Traditional 401(k) vs. Roth IRA — The Core Difference
The only real difference between a traditional and Roth retirement account is when you pay taxes. Traditional accounts use pre-tax dollars — you get a deduction now and pay ordinary income tax on withdrawals in retirement. Roth accounts use after-tax dollars — no deduction now, but all qualified withdrawals (contributions and growth) are completely tax-free in retirement.
- ›Traditional 401(k): Reduces taxable income today. Contributions grow tax-deferred. All withdrawals taxed as ordinary income. Required Minimum Distributions (RMDs) start at age 73.
- ›Roth IRA: No upfront deduction. Contributions grow tax-free. Qualified withdrawals are tax-free. No RMDs during your lifetime. Income limits apply ($161,000 single / $240,000 MFJ in 2024).
- ›Roth 401(k): Best of both — no income limits, higher contribution ceiling, employer match goes to traditional side, RMDs apply (rolling to Roth IRA eliminates this).
The Breakeven Tax Rate — The Right Framework
The traditional Roth-vs-Traditional debate often gets oversimplified to "are you in a higher bracket now or later?" But this ignores compounding and the effective tax rate on withdrawals. The breakeven tax rate answers this precisely: it is the exact retirement marginal rate at which both accounts produce identical after-tax wealth over your investment horizon.
If your expected retirement tax rate is below the breakeven, Traditional wins. If it is above, Roth wins. At the breakeven rate, the mathematical outcome is identical — making the choice about flexibility and risk (tax law risk, spending flexibility, estate planning) rather than arithmetic.
Employer Match — The Guaranteed Return
An employer match is the highest guaranteed return available to any investor. A 100% match on your first 6% of salary is literally a 100% instant return before any investment growth. The single most important retirement planning rule: always contribute at least enough to your 401(k) to capture the full employer match, regardless of the Roth vs. Traditional debate.
2024 Contribution Limits
| Account | Under 50 | Age 50+ (catch-up) |
|---|---|---|
| 401(k) / 403(b) / 457 | $23,000 | $30,500 |
| Traditional / Roth IRA | $7,000 | $8,000 |
| SEP-IRA | 25% of comp, max $69,000 | Same |
| SIMPLE IRA | $16,000 | $19,500 |
Frequently Asked Questions
Should I contribute to a 401(k) or Roth IRA first?
The optimal contribution order is generally:
- ›401(k) up to the full employer match — this is a guaranteed 50%–100% return
- ›Roth IRA up to the maximum ($7,000 in 2024, $8,000 if 50+)
- ›Back to 401(k) up to the annual limit ($23,000 in 2024)
- ›Taxable brokerage account for anything beyond that
Roth income limits: phases out at $146,000–$161,000 (single) and $230,000–$240,000 (MFJ) in 2024.
What is the breakeven tax rate and why does it matter?
The breakeven tax rate is derived by setting the after-tax value of the traditional account equal to the after-tax value of the Roth account and solving for the retirement tax rate.
- ›Below breakeven → Traditional 401(k) produces more after-tax wealth
- ›Above breakeven → Roth IRA produces more after-tax wealth
- ›At breakeven → mathematically identical; choose based on flexibility
- ›For most people the breakeven is close to their current marginal rate
The breakeven rate accounts for compounding, current vs. future taxes, and the time horizon — making it more accurate than simple bracket comparisons.
What are the 2024 401(k) and IRA contribution limits?
- ›401(k): $23,000 employee deferral; $30,500 if age 50+
- ›IRA (traditional or Roth): $7,000 combined; $8,000 if age 50+
- ›Roth IRA income phaseout: $146K–$161K single; $230K–$240K married
- ›Total 401(k) including employer contributions: up to $69,000
- ›Verify current limits annually at irs.gov — limits adjust for inflation
How does the employer match work in the calculation?
Example: $80,000 salary, 100% match up to 6%:
- ›Contribute 6% ($4,800) → get $4,800 match → $9,600 total
- ›Contribute 3% ($2,400) → get $2,400 match → you're leaving $2,400/year on the table
- ›Contribute 10% ($8,000) → still get $4,800 match (capped at 6%)
- ›Match is always pre-tax (traditional) regardless of your contribution type
The calculator compounds the match over your investment horizon — the long-run impact of employer match is enormous due to compounding.
Can I contribute to both a 401(k) and a Roth IRA in the same year?
- ›401(k) and IRA limits are independent — maxing one does not reduce the other
- ›You can contribute $23,000 to 401(k) and $7,000 to Roth IRA in the same year
- ›Roth IRA income limits apply: if you exceed them, use a backdoor Roth strategy
- ›Traditional IRA deductibility phases out if you have a workplace plan and income exceeds $77K–$87K (single) or $123K–$143K (MFJ) in 2024
What happens to my 401(k) when I change jobs?
- ›Roll to new employer 401(k) — simplest, keeps pre-tax status, RMD rules apply
- ›Roll to traditional IRA — more investment options, preserves tax deferral
- ›Roll to Roth IRA — converts pre-tax to Roth, taxes due now but tax-free later
- ›Cash out — almost always a mistake: income tax + 10% penalty + lost compounding
Use a direct rollover (institution-to-institution) to avoid mandatory 20% withholding. The 60-day indirect rollover rule means you have 60 days to deposit the funds or it is treated as a distribution.
At what age can I withdraw from these accounts penalty-free?
- ›Age 59½ — penalty-free withdrawals from all traditional and Roth accounts
- ›Roth IRA contributions — withdrawable anytime; earnings have a 5-year rule
- ›Rule of 55 — 401(k) withdrawals penalty-free if you leave employer at 55+
- ›Age 73 — RMDs begin for traditional 401(k) and IRA accounts (SECURE 2.0)
- ›SEPP / 72(t) — structured equal payments allow early access without penalty
Does the calculator save my inputs?
- ›Inputs are saved to localStorage automatically after each calculation
- ›Restored on next visit — no account required
- ›All computation is client-side — nothing is sent to any server
- ›Click Reset All to clear the form and delete saved data