Roth vs Traditional 401(k) Calculator, With the 2026 Roth Catch-Up Rule
Traditional 401(k) contributions save tax now; Roth contributions are tax-free later. The better choice comes down to two rates: your tax rate on the contribution today and your tax rate on withdrawals in retirement. From 2026, catch-up contributions must be Roth if your prior-year FICA wages from the employer exceeded $150,000.
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Compare Roth and traditional
Compares the same contribution made either way, with 2026 federal brackets and the standard deduction (IRS Rev. Proc. 2025-32; IRS Notice 2025-67) now, and the same brackets in today’s dollars in retirement. Your retirement rate is the federal bracket your retirement income reaches, plus the state rate you enter. Tax saved and invested is taxed at 15% on its growth. The catch-up rule is IRC §414(v)(7), added by SECURE 2.0 §603, with the $150,000 wage test for 2026 from IRS Notice 2025-67. It ignores taxes on Social Security benefits, Medicare premium surcharges and RMDs, which tend to favour Roth for larger balances.
A worked example
You’re 40, single, earn $90,000 in a 5% state, and put $10,000 into your 401(k) this year. You expect $50,000 a year of income in retirement, in today’s dollars. The money grows at 5% a year after inflation for 25 years.
| Tax traditional saves now: 22% federal + 5% state | $2,700 |
| Roth: $10,000 grows to, tax-free | $33,864 |
| Traditional: $33,864 less 17% tax in retirement (12% federal + 5% state) | $28,107 |
| Plus the $2,700 saved, invested, after tax on its growth | $8,177 |
| Traditional, total after tax | $36,283 |
Traditional wins by about $2,400 because your rate drops from 27% now to 17% in retirement. Flip those rates and Roth wins instead, by about $4,000. When the two rates are about the same, so are the results.
The 2026 Roth catch-up rule
From 2026, if your FICA wages from your employer in the previous year were more than $150,000, every catch-up contribution you make to that employer’s plan must be Roth (IRC §414(v)(7)). You don’t get to choose. Your regular $24,500 can still go either way.
In the calculator’s starting example, you’re 52 with $180,000 of 2025 FICA wages, so your $8,000 catch-up must be Roth. That costs $2,320 more in tax this year than pre-tax would have. If your plan has no Roth option at all, you can’t make catch-up contributions. The Roth catch-up rule page covers the details, including new hires and the self-employed.
What the calculator leaves out
It uses your federal bracket in retirement plus a flat state rate. Some things push the real retirement rate higher. Withdrawals can make more of your Social Security taxable, can raise Medicare premiums, and required minimum distributions from large traditional balances can push you into a higher bracket. Those effects favour Roth, especially for large balances, so treat a narrow traditional win as a tie.
Frequently asked questions
Is Roth or traditional better if I’m in the 22% bracket?
It depends on your rate in retirement. If you expect to be in the 12% bracket then, traditional usually wins. If you expect 22% or more, it’s close to even or Roth wins. Many people split contributions between the two to hedge, which is a reasonable answer when the numbers are close.
Does the Roth catch-up rule apply to my regular contributions?
No. It covers only catch-up contributions, the extra $8,000 from age 50 or $11,250 at ages 60 to 63 in 2026. Your first $24,500 can be pre-tax, Roth or a mix, whatever your wages.
Does my employer’s match go into Roth?
Traditionally the match goes in pre-tax, whatever you choose. Since SECURE 2.0, plans may let you take the match as Roth, and then it’s taxable income to you in the year it’s paid in.
Related reading
Sources: IRC §414(v) · IRC §402A · IRS Notice 2025-67 · IRS Rev. Proc. 2025-32