Retirement & Planning

Roth vs. Traditional 401(k) and your Paycheck

See how a Roth vs. Traditional 401(k) might affect your take home pay as well as your retirement savings.

Inputs

Annual salary

Contribution

Marginal tax rate

Estimates only. Adjust any value to recalculate instantly.

Results

Extra paycheck cost of going Roth $145.83 per month, for tax-free withdrawals later

Same contribution $583.33

Traditional paycheck cost $437.50

Roth paycheck cost $583.33

Roth costs more now $145.83

Monthly paycheck cost

Traditional $5.3k
Extra for Roth $1.8k

For the same $583.33 contribution, the Roth costs $145.83 more per month because it uses after-tax dollars — but every dollar, plus all growth, comes out tax-free in retirement. The traditional saves tax now and is taxed later.

How the roth vs. traditional 401(k) and your paycheck calculator works

It compares the same contribution two ways: a traditional 401(k), which lowers your paycheck by the contribution minus the tax saved, and a Roth, which uses after-tax dollars and costs the full amount today.

Worked example

Worked example: with annual salary of $70,000, contribution of 10.00% and marginal tax rate of 25.00%, the roth vs traditional 401(k) and your paycheck shows extra paycheck cost of going roth of $145.83.

Same contribution: $583.33
Traditional paycheck cost: $437.50
Roth paycheck cost: $583.33
Roth costs more now: $145.83

The formula

Traditional paycheck cost = contribution × (1 − tax rate). Roth paycheck cost = full contribution. Extra Roth cost = the difference.

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 vs. traditional 401(k) and your paycheck

Does a Roth 401(k) cost more per paycheck?

Yes — for the same contribution it reduces take-home pay by more, because it uses after-tax dollars. In return, every dollar and all growth come out tax-free in retirement.

Which should I choose?

Roth tends to win if you expect a higher tax rate in retirement than today; traditional if you expect a lower one. Splitting contributions hedges your bet on future rates.

Can I contribute to both?

Usually yes, within the combined annual limit. Many savers split contributions to diversify their future tax exposure.

Is the Roth vs. Traditional 401(k) and your Paycheck 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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