Traditional vs Roth: the core difference
Traditional 401k/IRA: contributions are pre-tax (you get a tax deduction now), investments grow tax-deferred, withdrawals in retirement are taxed as ordinary income.
Roth 401k/IRA: contributions are after-tax (no deduction now), investments grow tax-free, qualified withdrawals in retirement are completely tax-free.
When Traditional wins
If you're in a high tax bracket now and expect to be in a lower bracket in retirement, Traditional saves more. The deduction is worth more today than the tax you'll pay later.
When Roth wins
If you're in a low bracket now and expect to be in a higher bracket in retirement (or if tax rates generally rise), Roth wins. You lock in the lower rate today and pay nothing later.
Always capture your full employer match first
An employer match is an instant 50–100% return — no investment comes close. Before deciding Traditional vs Roth or paying down any debt, contribute at least enough to get the full match.
Frequently asked questions
What is the 2026 401k contribution limit?
The IRS 401k contribution limit for 2026 is $23,500 ($31,000 if you're 50 or older with catch-up contributions). IRA limits are $7,000 ($8,000 if 50+).
Is my data saved?
No. Everything runs locally in your browser.
For educational purposes only; not financial advice. Tax rules change. Consult a financial advisor for personalized retirement planning.