Roth vs Traditional Strategy Optimizer

Make an informed decision between Traditional 401k, Roth 401k, and Backdoor Roth IRA strategies. Get personalized recommendations based on your tax bracket, income level, and retirement goals.

Privacy First: Like all WealthLogic tools, your income and tax data stay in your browser. No data is sent to our servers.

Important Legal & Tax Disclaimer

This calculator is for educational and estimation purposes only. Tax laws, retirement account rules, and contribution limits are complex and subject to change. Individual circumstances vary significantly, and this tool makes assumptions that may not apply to your specific situation.

  • Tax laws and retirement account rules change frequently (including SECURE 2.0 Act provisions)
  • Your specific tax situation, employer plan rules, and state tax laws may differ
  • Roth conversion rules, pro-rata rules, and income limits have nuanced exceptions
  • This calculator does not account for all tax scenarios, deductions, or credits

Always consult with a qualified tax advisor, financial planner, or CPA before making retirement account contribution decisions.This calculator should not be used as the sole basis for financial or tax planning decisions.

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Your Financial Profile

per year
per year

2026 limit: $24,500 (401k) + $7,500 (IRA) = $32,000 combined

Your Tax Situation

Marginal Tax Rate
24.0%
Your top tax bracket
Effective Tax Rate
16.8%
Overall tax percentage
Tax Savings (Traditional)
$5,520
Annual savings from Traditional

WealthLogic Recommendation: Hybrid (40/60 Traditional/Roth)

You're in the middle brackets (22-24%) and expect some combination of higher taxes or higher retirement income. A Roth-leaning hybrid balances current tax savings with future tax protection.

* This recommendation is an estimate based on general tax principles. Always consult with a qualified tax advisor or financial planner before making retirement account decisions.

Confidence Level:Medium

Cash Flow Today

Compare your spendable income today with Traditional vs Roth contributions

Traditional 401k

$107,273
Annual take-home pay
Contribution: $23,000
Tax Savings: $5,520

Roth 401k

$101,753
Annual take-home pay
After-tax Contribution: $17,480
Difference: -$5,520

Portfolio Growth Comparison

Projected portfolio value at retirement (after taxes on Traditional withdrawals)

Assumptions: 7% annual return, 22% tax rate on Traditional withdrawals in retirement

Tax Diversification Strategy

Visual representation of your recommended mix of taxable and tax-free retirement funds

Why Tax Diversification Matters

  • ●Taxable (Traditional): Withdrawals are taxed as ordinary income. Good for years when you're in a lower tax bracket.
  • ●Tax-Free (Roth): Withdrawals are completely tax-free. Perfect for large expenses or years with higher income.

Strategy Insight: Having both Traditional and Roth accounts gives you flexibility to manage your taxable income in retirement, potentially keeping you in lower tax brackets and maximizing your overall after-tax wealth.

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