Roth vs Traditional 401(k) Analysis
Compare the benefits and tax implications of Roth and Traditional 401(k) contributions
Side-by-Side Comparison
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Feature | Traditional 401(k) | Roth 401(k) | |
|---|---|---|---|
Tax Treatment | Pre-tax contributions (reduces current taxable income) | After-tax contributions (no current tax benefit) | |
Withdrawals in Retirement | Taxed as ordinary income | Tax-free (including earnings) | |
Required Minimum Distributions | Required starting at age 73 | No RMDs during your lifetime | |
Early Withdrawal (Before 59Β½) | 10% penalty plus income tax | Contributions can be withdrawn penalty-free | |
Contribution Limits (2024) | $23,000 ($30,500 if 50+) | $23,000 ($30,500 if 50+) |
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Tax Implications Calculator
Current Age
Retirement Age
Annual Contribution ($)
Current Tax Rate (%)
Retirement Tax Rate (%)
Expected Annual Return (%)
Roth Conversion Calculator
Conversion Example
Converting $50,000 from Traditional to Roth:
β’ Tax Due Now: $12,000 (24% rate)
β’ Future Withdrawals: Tax-Free
β’ No RMDs Required
Withdrawal Rules
Roth: Contributions always tax-free
Roth: Earnings tax-free after 5 years + age 59Β½
Traditional: All withdrawals taxed
Personalized Recommendation
Traditional 401(k) May Be Better For You
Based on your inputs, you expect to be in a lower tax bracket in retirement (22%) compared to now (24%). This means deferring taxes with a Traditional 401(k) could save you money.
Note: This is a simplified analysis. Consult with a financial advisor for personalized advice.