QuietCalcsThe whole decision in one number
Roth and Traditional are mirror images: a Roth is funded with money you've already paid tax on, then grows and comes out tax-free; a Traditional is funded pre-tax (you get a deduction now) and is taxed when you withdraw. So the core question is simply whether your tax rate will be higher or lower in retirement than it is today.
Expect a higher rate later — common if you're early-career or rates rise — and Roth wins. Expect a lower rate — common if you're a high earner now who'll spend less in retirement — and Traditional wins. The break-even rate above is the exact tipping point for your numbers.
Why the comparison invests the tax refund
Putting, say, $7,000 into a Roth costs more out of pocket than $7,000 into a Traditional, because the Traditional contribution hands you a tax deduction — real cash back. A fair fight has to do something with that refund, so this calculator invests it in a taxable account each year on the Traditional side. That's why the two totals land so close together.
The quiet reason Roth often edges ahead
Notice that even when the tax rates are identical, Roth usually wins by a little. The reason is that the Traditional saver's invested refund sits in a regular taxable account, where its growth gets nibbled by capital-gains tax — while every dollar inside the Roth compounds completely untaxed. That drag is why the break-even retirement rate comes out a bit below your current rate, not exactly equal to it.
What this assumes
It treats your tax rates as flat percentages, where real brackets are tiered and retirement withdrawals fill the lower brackets first — so a careful retiree's effective rate can be lower than their bracket suggests. It also skips required minimum distributions, employer matches (which are pre-tax and land on the Traditional side either way), state taxes, and future changes to tax law and contribution limits. Treat the result as a well-reasoned guide, not a guarantee. Many people also split the difference and fund both. See the retirement & FIRE calculators for the bigger picture, or compound interest for how contributions grow.