Retirement & Planning

Roth (after-tax) Account or Pre-Tax Account?

Starting in 2006, you may have the option to contribute to Roth account. Use this calculator to help determine which retirement plan option might be best for you.

Inputs

Annual account contribution

Years until retirement

Annual return

Tax rate today

Tax rate in retirement

Estimates only. Adjust any value to recalculate instantly.

Results

Better after-tax outcome Roth account by $222,361 on equal contributions

Roth account (tax-free) $1,010,730

Pre-tax balance $1,010,730

Pre-tax after tax $788,370

Difference $222,361

After-tax retirement value

Roth $1.0M
Pre-tax (after tax) $788k

After-tax value Roth account (tax-free)Pre-tax (after tax)

On equal contributions, the Roth account wins when your retirement tax rate (22%) is at or above today's (24%). Pre-tax wins if you invest the upfront tax savings and your rate falls in retirement.

After-tax value by yearView table

Year	Roth (tax-free)	Pre-tax (after-tax)
1	$10,700	$8,346
2	$22,149	$17,276
3	$34,399	$26,832
4	$47,507	$37,056
5	$61,533	$47,996
6	$76,540	$59,701
7	$92,598	$72,226
8	$109,780	$85,628
9	$128,164	$99,968
10	$147,836	$115,312
11	$168,885	$131,730
12	$191,406	$149,297
13	$215,505	$168,094
14	$241,290	$188,206
15	$268,881	$209,727
16	$298,402	$232,754
17	$329,990	$257,392
18	$363,790	$283,756
19	$399,955	$311,965
20	$438,652	$342,148
21	$480,057	$374,445
22	$524,361	$409,002
23	$571,767	$445,978
24	$622,490	$485,542
25	$676,765	$527,876
26	$734,838	$573,174
27	$796,977	$621,642
28	$863,465	$673,503
29	$934,608	$728,994
30	$1,010,730	$788,370

How the roth (after-tax) account or pre-tax account? calculator works

It compares contributing the same amount to an after-tax (Roth) account versus a pre-tax account: the Roth grows tax-free, while the pre-tax balance is taxed at your expected retirement rate.

Worked example

Worked example: with annual account contribution of $10,000, years until retirement of 30 and annual return of 7.00%, the roth (after-tax) account or pre-tax account? shows better after-tax outcome of Roth account.

Roth account (tax-free): $1,010,730
Pre-tax balance: $1,010,730
Pre-tax after tax: $788,370
Difference: $222,361

The formula

Both grow as (balance + contribution) × (1 + return). Roth after-tax = balance. Pre-tax after-tax = balance × (1 − retirement tax rate).

Results are estimates for educational purposes and are not financial advice. Confirm exact figures with your lender, plan administrator or advisor.

Frequently asked

Questions about the roth (after-tax) account or pre-tax account?

After-tax (Roth) or pre-tax — which is better?

Roth wins when your retirement tax rate is at or above today’s; pre-tax wins when it will be lower and you invest the upfront tax savings. The calculator compares both after tax.

What does “after-tax” mean here?

It means Roth-style contributions made with money you have already paid income tax on, so qualified withdrawals — including all growth — come out tax-free.

Should I diversify across both?

Many advisors suggest holding some of each, so you can manage your taxable income in retirement by choosing which account to draw from.

Is the Roth (after-tax) Account or Pre-Tax Account? free to use?

Yes. Every calculator on FinCalculators is completely free, with no sign-up, login or paywall. You can run as many scenarios as you like.

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