Compare when you pay the tax — now with Roth or later with Traditional — using the same pre-tax saving budget.
Reviewed · Aug 20, 2026
What this does
Compares paying tax now with Roth versus later with Traditional using the same pre-tax saving budget.
Have ready
Your contribution amount and the tax rates you want to compare now versus in retirement.
Terra approachTransparent assumptionsEducational comparisonNo product recommendationHow Terra handles revenue →
Roth and Traditional in 30 seconds
The key question is not “tax-free or taxable?”
It is which marginal tax rate you would rather pay: the rate on these dollars today, or the rate that may apply when you withdraw Traditional money later.
Traditional / pre-taxTax break now. Tax generally due later.
For the same pre-tax saving budget, more money can go into Traditional because the model assumes you do not pay current income tax on that contribution.
RothTax now. Qualified withdrawals can be tax-free later.
For the same pre-tax saving budget, less money goes into Roth because the model first subtracts the current tax-rate assumption.
If retirement tax rate isLowerTraditional tends to lead
If retirement tax rate isAbout the sameBasic math is near a tie
Change the numbers yourself. Terra shows a transparent scenario, not a prediction or recommendation.
This equal-budget convention keeps the economic cost comparable: Traditional gets the full pre-tax amount; Roth gets the amount remaining after the current tax-rate assumption.
Use the marginal rate that would apply to this contribution, not your average/effective tax rate. You may use federal only or include state/local income tax — just use the same approach for both tax-rate fields.
This is the assumption that most directly changes the comparison. Use the same federal-only or combined-tax approach you used above.
Saved scenarios stay privately in this browser under My Terra. Nothing is saved unless you choose Save this scenario.
