🏦Traditional IRA vs Roth IRA Tax Benefit Calculator

Compare Traditional and Roth IRA tax benefits by income and contribution

$
$

Traditional IRA vs Roth IRA: Key Differences

A Traditional IRA allows you to deduct contributions from taxable income this year, reducing your current tax bill. Withdrawals in retirement are taxed as ordinary income. A Roth IRA offers no upfront deduction, but all qualified withdrawals — including investment gains — are completely tax-free in retirement.

The 2024 contribution limit is $7,000 per year ($8,000 if age 50+), shared across all IRA accounts. Roth eligibility phases out at higher incomes ($146,000–$161,000 for single filers in 2024). If income exceeds the limit, consider a backdoor Roth via a non-deductible Traditional IRA.

Frequently Asked Questions

Who benefits most from a Roth IRA?

Those expecting a higher tax bracket at retirement — typically younger, lower-income earners with a long investment horizon where tax-free growth compounds most powerfully.

Can I contribute to both a Traditional and a Roth IRA?

Yes, but combined contributions cannot exceed $7,000 in 2024. You can split contributions between the two account types in any proportion.