Retirement Savings Tax Strategy Tool

Retirement Savings Tax Strategy Tool (USA)

Choosing between Traditional (pre-tax) and Roth (after-tax) retirement accounts impacts when you receive your tax benefit. This tool illustrates the potential tax difference based on your assumed tax rates now versus in retirement.

Traditional: Pay tax later (in retirement). Contributions may be tax-deductible now. Growth is tax-deferred. Withdrawals in retirement are generally taxable.
Roth: Pay tax now. Contributions are made with after-tax money. Growth is tax-free. Qualified withdrawals in retirement are tax-free.

Generally, Traditional may be more beneficial if you expect to be in a lower tax bracket in retirement than you are now. Roth may be more beneficial if you expect to be in a higher tax bracket in retirement.

This tool provides a simplified illustration based on assumptions. It does not account for all retirement account rules, income limitations, or specific tax situations. Consult a tax professional or financial advisor for personalized advice.

Enter Your Assumptions

Hypothetical Amount to Save Annually ($): $

Estimated Current Marginal Income Tax Rate (%): %

Estimated Future Marginal Income Tax Rate in Retirement (%): %

* Use your marginal tax rates (the rate on your last dollar earned). Tax rates are subject to change and depend on income level and filing status.

Estimated Annual Investment Growth Rate (%) (Optional): %

Years Until Retirement (Optional):

Retirement Savings Tax Strategy Illustration

Illustration of potential tax impact based on your assumptions for Traditional vs. Roth savings.

Strategy depends on tax rates now vs. retirement. Consult a professional for personalized advice.

Your Assumptions:

Hypothetical Amount Saved Annually: $0.00

Estimated Current Marginal Tax Rate: 0.00%

Estimated Future Marginal Tax Rate: 0.00%

Estimated Growth Rate (Optional): 0.0%

Years Until Retirement (Optional): 0 Years

Potential Tax Impact Comparison:

Traditional (Pre-Tax)

Upfront Tax Saving: $0.00

Original Investment Amount: $0.00

Potential Future Value (if growth/time used): $0.00

Potential Tax Paid on Withdrawal (in retirement): $0.00

Net Amount After Tax (Hypothetical): $0.00

Roth (After-Tax)

Upfront Tax Saving: $0.00 (None)

Amount Available to Invest (after tax): $0.00

Potential Future Value (if growth/time used): $0.00

Potential Tax Paid on Withdrawal (in retirement): $0.00 (Tax-Free Qualified Withdrawals)

Net Amount After Tax (Hypothetical): $0.00

Overall Conclusion: Enter assumptions and click "Illustrate Impact".