1099tax.app
Guides

Free Tools

1099tax.appretirement-account-calculator

2026 401(k) vs IRA vs Roth IRA — Tax-Savings Calculator

See how a pre-tax (traditional) or Roth contribution could change your taxes now and in retirement. Educational estimates only — not tax, legal, investment, or financial advice.

Educational estimates only — not tax, legal, investment, or financial advice.

01

You

02

Contribution

03

Assumptions

Free Tools

What type of retirement saver am I?

  1. 1.How do you want to invest?

  2. 2.How comfortable are you with paperwork and IRS rules on prohibited transactions?

  3. 3.Do you have an employer plan with a match?

  4. 4.Balance you could move:

  5. 5.Time you want to spend managing:

0 of 5 answered

How moving from managed to self-directed works

  1. 1

    Open an account with a self-directed custodian.

  2. 2

    Move the money by a trustee-to-trustee transfer (IRA → IRA) or a direct rollover (401(k) → IRA, usually after you leave the employer or if the plan allows in-service rollovers). Avoid the 60-day indirect route, which has withholding and a once-per-12-months limit for IRAs.

  3. 3

    The custodian buys the asset. Metals must meet IRS fineness rules and be held by an approved depository, not at home. Real estate must be held by the IRA with no personal use (prohibited-transaction rules).

  4. 4

    Expect setup, storage, and annual fees.

This quiz is educational and is not investment, tax, or legal advice.

How it works

Three steps, sixty seconds

01

Enter your details

Age, filing status, MAGI, and whether you are covered by a workplace plan.

02

Pick an account

Choose a 401(k), Roth 401(k), traditional IRA, or Roth IRA — or compare all four. Enter your contribution and an optional employer match.

03

See the break-even

After-tax value at withdrawal, tax saved now, Roth eligibility, IRA deductibility, and which side wins.

FAQ

Retirement account questions, answered

Sources

Limits from IRS Notice 2025-67 (tax year 2026).

Traditional or Roth? A Plain-English Guide to Retirement Accounts in 2026

Last reviewed October 2026 by the 1099tax.app team. These tools give estimates, not tax or legal advice.

What this tool helps you decide, and who it's for

Every dollar you put into a retirement account gets a tax break either now (traditional) or later (Roth). The calculator above compares the two for the account you choose. This guide explains the rules underneath: what changed for 2026, how withdrawals are taxed, and the timing rules that catch people out.

It's for:

  • Employees choosing between the traditional and Roth options in a workplace 401(k), 403(b) or TSP.
  • Self-employed people looking at a Solo 401(k) or SEP-IRA.
  • People in their 50s and early 60s who can make catch-up contributions.
  • Retirees and near-retirees thinking about required withdrawals and Roth conversions.

How it works and the 2026 rules

The core trade-off

  • Traditional: you deduct (or exclude from your paycheck) what you contribute now. The money grows tax-deferred, and every dollar you withdraw is taxed as ordinary income.
  • Roth: you pay tax on the money now. Growth and qualified withdrawals come out tax-free.

If your tax rate in retirement will be lower than today, traditional usually wins. If it will be higher, Roth usually wins. If it's the same, the two come out roughly even, as long as you invest the tax savings from a traditional contribution (which is what the calculator's “invest the tax savings” switch models).

2026 limits at a glance (IRS Notice 2025-67)

  • 401(k), 403(b), governmental 457 and TSP: $24,500, plus $8,000 catch-up at age 50 or older, or $11,250 at ages 60–63.
  • IRA (traditional and Roth combined): $7,500, plus $1,100 catch-up at 50 or older.
  • Total contributions to a defined-contribution account from all sources, including employer and Solo 401(k) employer contributions: $72,000.

New for 2026: Roth catch-ups for higher earners

Starting in 2026, if your prior-year wages from the employer sponsoring the plan were over $150,000, any catch-up contributions you make to that plan must be Roth, according to the IRS. Your regular contributions can still be traditional. If your plan doesn't offer a Roth option, check with your plan administrator about how it is handling this rule.

Getting money out

  • Before age 59½, withdrawals from traditional accounts are generally taxed and also hit with a 10% additional tax, unless an exception applies.
  • Roth IRA earnings come out tax-free only if the withdrawal is “qualified”: generally, you're 59½ or older and at least five years have passed since your first Roth IRA contribution. Your own contributions (not earnings) can come out of a Roth IRA at any time.
  • Required minimum distributions (RMDs): traditional IRA and 401(k) owners generally must start withdrawals at age 73. Roth IRAs have no RMDs during the owner's lifetime, and since 2024 Roth 401(k)s don't either.

A worked example

A 45-year-old single filer earns $110,000, which puts them in the 24% federal bracket. They plan to contribute $10,000 this year to their 401(k) and expect to be in the 22% bracket in retirement, 20 years from now. They assume 6% annual growth.

Traditional:

  • Tax saved now: $10,000 × 24% = $2,400
  • $10,000 grows to about $32,071 over 20 years
  • Taxed at 22% on withdrawal: about $25,016 left after tax
  • If the $2,400 saved is also invested at 6%, it grows to about $7,697 (before tax on that growth), adding to the traditional total.

Roth:

  • No tax saved now. The full $10,000 goes in after tax.
  • It grows to about $32,071, all tax-free

The Roth figure looks bigger, but it cost $2,400 more out of pocket today. The fair comparison is the one the calculator draws: traditional plus the invested tax savings, against Roth. Together, the traditional side comes to about $32,713 ($25,016 + $7,697), slightly ahead of the Roth's $32,071, because the retirement rate (22%) is lower than today's (24%). Tax on the side account's growth can wipe out that small edge, so in practice this is close to a tie. If you expected a 32% bracket in retirement, Roth would win clearly.

How to read your result

  • Tax saved now: the immediate benefit of a traditional contribution.
  • After-tax value at withdrawal: what you keep after paying tax. This is the number to compare across accounts.
  • Winner: the account with the higher after-tax value under your assumptions. Small differences mean the choice is close, and spreading money across both can be a reasonable hedge.
  • Eligibility notes: whether you can contribute to a Roth IRA, and whether a traditional IRA contribution is deductible at your income.

Common mistakes

  1. Comparing the Roth balance to the traditional balance before tax. Always compare after-tax figures.
  2. Assuming your retirement bracket will be lower. Pensions, Social Security, RMDs and a spouse's death (leaving you filing single) can keep it high.
  3. Missing the Roth catch-up rule. If you earned over $150,000 from your employer in 2025, your 2026 catch-ups must be Roth.
  4. Contributing too much to an IRA. Excess contributions face a 6% excise tax each year until fixed.
  5. Forgetting the five-year rule when planning Roth withdrawals in the first years after opening the account.
  6. Ignoring the employer match. Contribute at least enough to get the full match before looking at an IRA.

Frequently asked questions

Can I have both a 401(k) and an IRA?

Yes. Workplace coverage can limit whether a traditional IRA contribution is deductible, but you can still contribute.

What if my income is too high for a Roth IRA?

Many people make a non-deductible traditional IRA contribution and convert it to Roth (a “backdoor Roth”). Watch the pro-rata rule if you have other pre-tax IRA money.

Is a Roth conversion taxed?

Yes. The converted amount is ordinary income in the year you convert.

When must I start taking money out?

Generally at age 73 for traditional accounts. Roth IRAs have no lifetime RMDs.

Can self-employed people get higher limits?

Yes. A Solo 401(k) allows employee deferrals plus an employer contribution, up to the $72,000 total for 2026 (plus catch-ups).

Does an employer match go in as Roth?

Matches have traditionally been pre-tax. Some plans now allow Roth matches, which are taxable to you in the year they're made.

Sources

Related free tools

Self-employment tax estimatorRSU tax & withholding calculator1099 vs W-2 rate calculator

Educational estimates only — not tax, legal, investment, or financial advice.