Compare traditional 401k and Roth IRA retirement savings strategies to optimize your tax benefits and retirement income. This calculator analyzes current tax savings versus future tax-free withdrawals to help you make the best choice for your situation.
How to Use This 401k vs Roth IRA Calculator
This comprehensive calculator helps you understand the long-term impact of your retirement savings strategy:
- Tax advantages comparison between pre-tax and after-tax contributions
- Employer matching benefits and their impact on total returns
- Future purchasing power based on different tax scenarios
- Withdrawal strategies and required minimum distributions
Key Differences Between 401k and Roth IRA
Traditional 401k: Pre-tax contributions, immediate tax deduction, taxed withdrawals in retirement, required minimum distributions at age 73.
Roth IRA: After-tax contributions, no immediate tax deduction, tax-free withdrawals in retirement, no required minimum distributions.
Factors That Influence Your Decision
Consider these key factors when choosing your strategy:
- Current tax bracket versus expected retirement tax bracket
- Availability of employer matching (always maximize this first)
- Time horizon until retirement and compound growth potential
- Expected retirement income needs and tax diversification
- Estate planning goals and inheritance considerations