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Traditional or Roth 401(k)

Last updated October 29, 2026

A knob moves your 401(k), 403(b), 457 or TSP contributions between pre-tax (traditional) and Roth, in steps of 10%. For each setting, the page shows one figure, how far it comes out ahead of or behind what you do now over your lifetime, and a chart of every retirement year: what you withdraw from each account, the tax, and your federal bracket.

Pre-tax money is deducted now and taxed when it comes out. Roth money is taxed now and comes out tax-free. Which costs less depends on two rates: the rate now, from the salary in your plan, and the rate later, from what your own plan withdraws in retirement.

The rate now is what deducting the pre-tax dollars takes off federal and state income tax, per dollar, in each year until you retire.

The rate later comes from your plan: the extra federal and state tax, and the extra Medicare income surcharge, that the pre-tax dollars add over your retirement, divided by the extra pre-tax dollars withdrawn, required withdrawals included. It is measured on the plan's flat assumed returns, so the settings differ only by the setting. A large pre-tax balance can push withdrawals into higher brackets, and extra income can make more of Social Security taxable, so the rate later can be higher than your bracket today.

The figure at the top counts each dollar you put in once: the rate it saves now against the rate it is taxed at later, in today's dollars. Growth cancels out, because a dollar taxed at 24% now and the same dollar taxed at 24% after it has grown leave the same amount.

The chart shows retirement tax as it is paid, so it includes the growth on the money and does not subtract from the tax saved now. The bars stay the same height at every setting, because your plan pays for the same spending every year. What changes is which account the money comes from and the tax on it.

For a couple, every setting is also checked with one of you living many years on their own and paying tax as a single filer. The page mentions it only when that would turn the result around.

Only your own contributions move between the two sides. The total stays the same, and an employer match stays pre-tax.

Under each knob, the setting is also shown the way payroll asks for it: dollars a month, and a percentage of the salary in your plan to one decimal. If that salary includes a bonus, the percentages assume your contributions also come out of the bonus, as they do in most plans. When rounding both percentages to whole numbers would pass this year's limit, the page says so: contributions would stop before December, and a match paid with each paycheck can stop with them.

These are estimates, not a recommendation. Tax law can change, and so can your income.