Mr Calcu | Roth Vs Traditional IRA Optimizer

Compare Roth IRA and Traditional IRA for optimal retirement savings strategy

Roth Vs Traditional IRA Optimizer

Current Age

Expected Retirement Age

Current Income ($)

Expected Retirement Income ($)

Current Tax Rate (%) 24%

Expected Retirement Tax Rate (%) 20%

Roth Vs Traditional IRA Guidelines

Enter your current age and expected retirement age.
Input your current income and expected income in retirement.
Adjust the tax rate assumptions to reflect your situation.

Roth Vs Traditional IRA Description

Understanding IRA Options

When saving for retirement, choosing between a Roth IRA and a Traditional IRA can be challenging. This tool helps you compare the two based on your financial situation and goals.

A Roth IRA allows contributions with after-tax dollars, and the money grows tax-free. Withdrawals are tax-free if certain conditions are met. In contrast, a Traditional IRA allows tax-deductible contributions, and the money grows tax-deferred. Withdrawals are taxed as ordinary income.

According to the IRS, 'the choice between a Roth IRA and a Traditional IRA depends on your individual circumstances and financial goals' [IRS.gov].

Example Calculation

Scenario	Roth IRA	Traditional IRA
Contribution Limit	$6,000 ($7,000 if 50+)	$6,000 ($7,000 if 50+)
Tax Implications	Contributions taxed upfront; withdrawals tax-free	Contributions tax-deductible; withdrawals taxed

Frequently Asked Questions

Roth IRA contributions are made with after-tax dollars and grow tax-free, while Traditional IRA contributions are tax-deductible and grow tax-deferred.

It depends on your current tax situation, expected tax bracket in retirement, and personal preferences.