Roth vs. Traditional IRA: Which Wins for You in 2025?
The right answer depends on your current tax bracket, your expected retirement tax rate, and how long your money has to grow. Our break-even calculator runs the numbers — with 2025 IRS limits and state tax data built in.
Break-Even Calculator: Roth vs. Traditional IRA
Enter your details below. The calculator estimates your after-tax retirement balance under both scenarios using 2025 IRS rules and current federal tax brackets.
🧮 Roth vs. Traditional IRA Break-Even Calculator (2025)
Roth vs. Traditional IRA: At a Glance
Both account types have the same contribution limits — the key difference is when you pay taxes.
2025 IRA Contribution & Income Limits
Roth IRA Income Limits (2025)
| MAGI Range | Filing Status | Roth Allowed |
|---|---|---|
| Under $150,000 | Single | Full ($7,000) |
| $150,000–$165,000 | Single | Partial (reduced) |
| Over $165,000 | Single | Ineligible (use Backdoor Roth) |
| Under $236,000 | Married Filing Jointly | Full ($7,000) |
| $236,000–$246,000 | Married Filing Jointly | Partial (reduced) |
| Over $246,000 | Married Filing Jointly | Ineligible (use Backdoor Roth) |
Traditional IRA Deductibility Phase-Out (2025)
| MAGI Range | Filing Status | Has Workplace Plan? |
|---|---|---|
| $79,000–$89,000 | Single | Yes — deductibility phases out |
| $126,000–$146,000 | Married Filing Jointly | You have one |
| $236,000–$246,000 | Married Filing Jointly | Spouse has one (you don't) |
| $0–$10,000 | Married Filing Separately | Yes |
| No limit | Any | No workplace plan — always fully deductible |
Sources: IRS.gov Retirement Topics — IRA Contribution Limits; Fidelity Roth IRA Income Limits (November 2025); Ramsey Solutions IRA limits (2026); SoFi IRA contribution calculator (January 2026).
When Should You Choose Each Account?
The break-even question is really about tax brackets: if you expect to pay more tax in retirement than today, Roth wins. If less, Traditional wins. But there are nuances:
- Choose Roth
You're early in your career (low bracket now)
If you're in the 10% or 12% bracket today but expect to earn more over time, paying tax now at a low rate beats paying it at 22–32% in retirement. Young savers benefit most from decades of tax-free compounding.
- Choose Traditional
You're in your peak earning years (high bracket now)
If you're at the 32% or 35% bracket now and expect a lower tax rate in retirement, the Traditional IRA deduction can be worth thousands per year — and may be more valuable than future tax-free growth.
- Choose Roth
You want tax-free income in retirement
Social Security, pensions, and RMDs from Traditional accounts all push up taxable income in retirement. Roth withdrawals are invisible to the IRS, giving you more control over your taxable income — and potentially reducing Medicare premiums (IRMAA).
- Choose Traditional
You expect a much lower income in retirement
If you plan to retire with modest Social Security, minimal pension income, and low expenses, your retirement tax rate may drop to 10–12%. In that case, the Traditional deduction now could be worth more than the Roth's future tax-free withdrawals.
- Choose Roth
You don't want Required Minimum Distributions (RMDs)
Traditional IRAs require you to begin withdrawing at age 73 (SECURE 2.0). Roth IRAs have no RMDs during the owner's lifetime, making them ideal for those who want to leave assets to heirs or delay withdrawals indefinitely.
- Consider Both
Tax diversification is valuable at any income
Many financial planners recommend holding both Roth and Traditional accounts — "tax diversification" — to give you flexibility in retirement to draw from the most tax-efficient source each year. You can split your $7,000 annual IRA contribution across both account types.
- Backdoor Roth
Your income is too high for a direct Roth contribution
High earners above the Roth phase-out can still access Roth benefits through a Backdoor Roth conversion: contribute to a non-deductible Traditional IRA, then convert to Roth. Consult a tax advisor — the "pro-rata rule" can complicate this if you have other Traditional IRA balances.
See your full retirement picture
Plootus integrates your IRA with 401(k), Social Security, and spending — so you know exactly where you stand.
Roth vs. Traditional IRA — FAQ
Sources
- IRS.gov — 2025 IRA contribution limits; Roth IRA income phase-outs; Traditional IRA deductibility rules; RMD age (73 under SECURE 2.0); Publication 590-A
- Fidelity.com — Roth IRA income limits 2025 and 2026 (citing IRS November 2025 announcement); MAGI calculation guidance
- H&R Block — Combined contribution limit rules; 5-year rule; phase-out ranges
- Ramsey Solutions — 2025 and 2026 IRA contribution limits
- SoFi IRA Contribution Calculator — 2026 contribution limit confirmation ($7,500 base; $8,600 with catch-up)
- Vanguard — Roth vs. Traditional IRA eligibility and rules comparison
- Tax Foundation — 2025 Individual Income Tax Rates by State; individual state revenue department websites
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