Roth vs Traditional 401(k) Tax Impact Analyzer (2025 Edition)
"See which 401(k) strategy saves you more in taxes, now or later."
Compare the long-term impact of Roth vs. Traditional 401(k) contributions using 2025 tax brackets. This calculator estimates how much your retirement balance and after-tax income could differ depending on when you pay taxes, today or in retirement.
Example: $100,000 - Used to compute tax bracket
Example: $22,500 - 2025 employee limit
Example: $5,000 - Optional, same for both types
Example: 25 - Projection horizon
Example: 6% - Growth rate
Example: 24% - Current bracket for pre-tax savings
Example: 20% - Expected tax rate in retirement
Example: 2.5% - For inflation-adjusted comparison
Adjust for 3% annual inflation
"How Roth vs Traditional 401(k) Works"
Understanding the key differences between Roth and Traditional 401(k) options can help you make the best decision for your financial future.
You save pre-tax, lower your current taxable income, but pay taxes on withdrawals.
- Tax deduction now
- Taxes on retirement withdrawals
- Good if you expect lower tax rate in retirement
You pay taxes now, but withdrawals (including earnings) are completely tax-free in retirement.
- No tax deduction now
- Tax-free retirement withdrawals
- Good if you expect higher tax rate in retirement
| Type | Under 50 | Age 50+ (Catch-Up) |
|---|---|---|
| Employee | $22,500 | $30,000 |
| Employer + Employee | $69,000 | $76,500 |
| If You Expect... | Choose... |
|---|---|
| Higher tax rate in retirement | Roth 401(k) |
| Lower tax rate in retirement | Traditional 401(k) |
| Need lower taxable income today | Traditional 401(k) |
| Want tax-free withdrawals later | Roth 401(k) |
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Calculate your 401(k) catch-up contributions for 2025 and see how much extra you can save after age 50.
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