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Planning workspace · reviewed October 10, 2026

Roth vs. traditional retirement saving

Tax timing is one part of a retirement decision. Compare both approaches under the same savings, investment and withdrawal assumptions.

2025 standard rules · 2026 form projections

Compare equal pre-tax economic budgets. A deductible traditional contribution uses the full budget; the Roth contribution uses the budget left after current income tax. Actual IRA limits and deduction / income eligibility must be checked separately.

Equal-budget comparison

Qualified Roth withdrawal and fully deductible traditional contribution assumed
MeasureTraditionalRoth
Annual contribution$5,000.00$3,800.00
After-tax amount at horizon$131,933.16$131,933.16

Roth minus traditional after-tax value: $0.00. When current and retirement tax rates are equal, the modeled after-tax values are equal.

  • Equal annual pre-tax economic budget, beginning-of-year contributions and qualified Roth withdrawals.
  • Traditional contributions assumed fully deductible; IRA contribution limits, income eligibility, deduction phaseouts, penalties and reinvested tax savings beyond this budget model are excluded.

Reviewed October 10, 2026. IRS reference. 2026 Form 8606 output is a planning estimate based on the 2025 structure.

Make the comparison fair

Traditional IRA deductions depend on eligibility; Roth contributions are not deductible. An assumed current deduction must be real before it belongs in your model. Qualified Roth distributions receive different tax treatment from taxable traditional distributions.

Test uncertainty

Try several future tax rates instead of treating one prediction as certain. Review contribution eligibility, investment horizon, access needs and the tax treatment of withdrawals with your adviser.

Sources and next steps

Reviewed October 10, 2026. This independent educational website is not affiliated with the IRS. Special transactions need professional review.

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