Roth vs Traditional 401(k) Calculator 2026 – Which Lowers Taxes More?
Compare Roth vs Traditional 401(k) in 2026. Estimate take‑home pay today, taxes in retirement, and break‑even points based on your assumptions.
Roth vs Traditional 401(k) Calculator 2026 – Which Lowers Taxes More?
Introduction
Should you choose Roth or Traditional in 2026? The right answer depends on your current vs future tax rates and your cash‑flow needs. Use this guide to compare take‑home pay today with Roth vs the up‑front tax savings of Traditional—and see long‑term outcomes.
Key Differences
- Traditional: pre‑tax contributions lower taxable income now; withdrawals taxed later
- Roth: after‑tax contributions now; qualified withdrawals are tax‑free later
- Matches go to Traditional in many plans, regardless of your choice
How to Use the Calculator
- Enter salary, state, and marginal tax rates
- Choose contribution percent and employer match
- Toggle Roth vs Traditional and compare take‑home pay
- Add retirement assumptions (return, years to retirement, future tax rate)
- View estimated after‑tax retirement value for each choice
Quick Examples (Illustrative)
Case A: Lower Future Tax Rate → Traditional Advantage
- Current marginal: 24%, future retirement: 15%
- Traditional saves more now and you pay less later → higher after‑tax value
Case B: Higher Future Tax Rate → Roth Advantage
- Current marginal: 12%, future retirement: 22%
- Roth avoids higher future taxes → higher after‑tax value
Case C: Unsure → Split Contributions
- 50/50 Roth/Traditional hedges future rate uncertainty
Rules of Thumb for 2026
- Expect higher future income/taxes → lean Roth
- Need cash‑flow today or itemize → lean Traditional
- Maxing the plan? Consider a mix for flexibility
Optimization Tips
- Capture full employer match first
- Coordinate with HSA (triple tax advantage)
- Revisit choice after raises, state moves, or marriage
- Consider Roth conversions in unusually low‑income years
FAQ
Q: Does Roth always reduce my refund?
A: Roth increases current taxes vs Traditional, but can cut future taxes dramatically.
Q: Can I change mid‑year?
A: Many plans allow it; check your HR portal.
Q: Where do employer matches go?
A: Typically to Traditional; they’re taxable in retirement.
Related Tools
- 401(k) Contribution Calculator 2026: /calculator/retirement
- Tax Bracket Calculator 2026: /calculator
- Take‑Home Pay Calculator 2026: /calculator
CTA: Compare Your Scenarios
Model Roth vs Traditional side‑by‑side, pick a contribution split, and export a one‑page action plan for HR updates.
Key Takeaways
- Start contributing to retirement accounts as early as possible to benefit from compound growth
- Review your retirement plan annually to stay on track with your goals
- Consider tax-advantaged accounts like 401(k) and IRA to maximize savings
How to Use This Calculator
- Enter your financial details in the fields above
- Adjust parameters to match your specific situation
- Review the calculated results and projections
- Compare different scenarios to find the optimal strategy
Tips for Better Results
- Use realistic estimates based on current market conditions
- Update your calculations regularly as your situation changes
- Consider consulting a financial advisor for complex decisions
- Remember that calculator results are estimates, not guarantees