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Which is better for me, a Traditional IRA or a Roth IRA?

Which is better, a Traditional IRA or a Roth IRA? Traditional IRAs offer tax-deferred earnings and tax-deductible contributions. Roth IRAs offer tax-free earnings, but contributions are not deductible.

All fields are required.

Current Traditional IRA amount

Current tax bracket

Retirement tax bracket

Estimated investment rate of return

How much do you plan to save each year

Amount saved is

Maximum IRA sheltered contribution

How many years until you retire

Calculator Results

Financial Details

Details	Traditional IRA	Roth IRA
Sheltered	$119,694.53	$95,062.16
Non-sheltered	$6,486.04	$0.00
Total before taxes	$126,180.57	$95,062.16
Total after taxes	$108,226.39	$95,062.16

Calculator results detail

When you invest money in a Roth IRA account, you pay taxes on your investment today, but you do not pay taxes when you withdraw the funds. If you convert your Traditional IRA account to a Roth IRA account today, you would pay $2,800.00 in taxes. To keep the comparison fair, the non conversion figure assumes you take the same amount and place it in a non-sheltered account until you retire.

Comparison details

From annual contributions	Traditional IRA	Roth IRA
Total contribution before taxes	$3,000.00	$3,000.00
Sheltered IRA contribution, before taxes	$3,000.00	$3,000.00
Sheltered IRA contribution, after taxes	$3,000.00	$2,160.00
Non-sheltered contribution, before taxes	$0.00	$0.00
Non-sheltered contribution, after taxes	$0.00	$0.00
Total tax sheltered IRA, at retirement	$87,972.84	$63,340.47
Total non-sheltered, at retirement	$0.00	$0.00

From IRA conversion	Traditional IRA	Roth IRA
Total amount to convert	$0.00	$10,000.00
Tax due on conversion	$0.00	$2,800.00
Total tax sheltered IRA, at retirement	$31,721.69	$31,721.69
Total non-sheltered, at retirement	$6,486.04	$0.00

Calculator tips

This calculator uses annual compounding. Annual deposits start today and the final withdrawal amount is available one year after the last deposit.

The after tax amount assumes that the Roth balance is taxed at retirement date, rather than as the funds are withdrawn.

Your actual qualifying contribution may differ significantly from the amounts listed above (for reasons such as income, filing status, employer benefits, and more). We strongly recommend that you consult your tax advisor before contributing to a retirement program. Qualifying contributions are usually limited as follows:

Year	Annual Contribution Limit
2002 through 2004	$3,000 per individual
2005 through 2007	$4,000 per individual
2008 through 2012	$5,000 per individual
2013 onward*	$5,500 per individual

* Beginning in 2009, the contribution limit will adjust annually for inflation in $500 increments.

If you are age 50 or over, you may qualify for an additional catch-up contribution as follows:

Year	Additional Catch-Up Contribution
2002 through 2005	$500 per individual
2006 onward	$1,000 per individual

Calculator disclaimer

The information provided by these calculators is intended for illustrative purposes only and is not intended to purport actual user-defined parameters. The default figures shown are hypothetical and may not be applicable to your individual situation. Be sure to consult a financial professional prior to relying on the results.