A Traditional contribution comes off the top of your income, so it saves you your marginal rate, the one on your last dollar earned. A withdrawal in retirement is usually your only income, so it fills your standard deduction and then your lowest brackets from the bottom up, and what you pay is your effective rate. Almost every comparison of these two accounts quietly assumes the two rates are the same, and they are not.
On 2026 brackets a single filer in the 22 percent bracket has to pull more than $289,101 a year out of a Traditional account before the effective rate on those withdrawals catches the 22 percent they deducted at. A married couple filing jointly has to pull more than $576,050. Median income for an entire US household aged 65 or over is $56,680, including Social Security.
That does not make Roth wrong. It makes the usual reason for choosing it wrong. The real arguments for Roth are that the contribution cap is the same number for both accounts while a Roth dollar is worth more, that Roth IRAs escape required minimum distributions, that a surviving spouse gets pushed onto single brackets, and that future tax law is a guess. Those are good arguments. Expecting a lower rate in retirement is not a reason to choose Roth, it is a reason to choose Traditional.
Your marginal rate is what the next dollar you earn is taxed at, which for a $90,000 single earner in 2026 is 22 percent. Your effective rate is the total tax you owe divided by your total income, which for that same person is 12.2 percent. A deduction saves you the marginal rate. Income taxed from the bottom up, like a retirement withdrawal, is charged at the effective rate.
It is the standard advice and it is weaker than it sounds. Someone in the 12 percent bracket still has to plan on pulling more than $92,810 a year out of the account as a single filer before Roth wins on rates alone. The genuine reason for a young saver to choose Roth is that they are likely to be capped by the contribution limit for decades, and a Roth dollar shelters more real money than a Traditional one.
The $24,500 elective deferral limit for 2026 is one combined cap across Roth and pre-tax, not $24,500 of each, and it rises to $32,500 at age 50 and over. Because a Roth dollar is already taxed, filling a $24,500 Roth costs about $31,410 of gross income at a 22 percent marginal rate. Spend that same gross amount on Traditional and only $24,500 fits inside the plan, leaving $6,910 to sit in a taxable account. The Roth advantage is the tax drag on that $6,910 for as long as you hold it, which is smaller than the raw $6,910 but is the one argument here that needs no guess about future rates.
A Traditional 401k or IRA must start paying out at age 73, whether you want the money or not, and a large balance can force withdrawals that push you into a higher bracket than you planned for. Roth IRAs have no required minimum distributions during the owner's lifetime, and since 2024 neither do Roth 401ks.
For most people that is the answer the math actually points at. Traditional contributions are most valuable while they are coming off a high marginal bracket, and a Traditional balance is most valuable when it is small enough to be withdrawn through your deductions and lowest brackets. Filling those low brackets is a limited resource, so having both gives you something to draw from in a year when pulling more Traditional would be expensive.
No, because you do not get a choice. Employer matching contributions go into a pre-tax bucket regardless of whether your own contributions are Roth or Traditional, so everyone with a match ends up with some Traditional money. That is another argument for treating this as a mix rather than a single decision.
Roth vs Traditional, 2026 tax rules
You deduct a Traditional contribution at your marginal rate. You pay tax on the withdrawal at your effective rate. Those are not the same number, and the gap between them is the whole answer.
Household income if you file jointly. This is only used to find which bracket your last dollar sits in, which is the rate a deduction saves you.
This is the number that decides it, and it is the one people guess worst. Median income for an entire US household aged 65 or over is $56,680, and that figure includes Social Security.
On the same pre-tax dollars, the one that leaves you with more is
Traditional
by $88,823 more in your pocket after tax
You deduct at 22% and withdraw at 8.0%. That 14.0% gap, applied to a $632,490 pot, is the entire difference between the two accounts.
A deduction comes off the top of your income. A withdrawal fills your deductions and your lowest brackets from the bottom. That asymmetry is why the two numbers differ so much.
your marginal bracket on today's income
$18,150 comes out tax free first, then the 10 and 12 percent brackets fill up
Traditional keeps winning until you pull out more than
$289,102 a year
Past that point your effective retirement rate finally catches the 22% you deducted at, and Roth takes the lead.
The comparison above is about tax rates. These four things are not, and any one of them can outweigh it.
The comparison holds your pre-tax cost constant, which is the only way to compare the two fairly. Put the same gross dollars to work either way. Traditional invests all of it and pays tax at the end. Roth pays tax first and invests what is left, then owes nothing later.
That makes the whole thing collapse to one comparison. Traditional leaves you 1 minus your effective retirement rate. Roth leaves you 1 minus your marginal rate today. Whichever of those two rates is lower wins. Both the amount you contribute and the return you earn cancel out of that comparison entirely, which is why the winner is decided by your rates and not by how big the account gets.
One assumption is doing real work there and it is worth naming. Using your effective rate for the withdrawal only holds if the withdrawal is close to your whole income in retirement. Stack a pension or a large Social Security benefit underneath it and the withdrawal sits on top of that income rather than filling the low brackets itself, so the rate that matters moves toward marginal and the case for Traditional weakens. Set the withdrawal box to the part of your retirement income that will actually come out of the account and the number below is honest.
Not sure what you will actually spend in retirement? Work out your retirement number, or see what Social Security adds at each claiming age.
Brackets, the standard deduction and the extra standard deduction at age 65 or over are the 2026 figures from IRS Rev. Proc. 2025-32. Everything is in real terms, on the basis that brackets and wages are both indexed to inflation, so a 2026 bracket is the right comparison for a 2026 salary however far away retirement is.
The OBBBA bonus deduction for people 65 and over is deliberately left out of the headline. It is worth up to $6,000 and would put your withdrawal rate at 6.8%, but two things make it the wrong basis for a decision. It only exists for tax years 2025 through 2028, so anyone still saving will almost certainly never see it. And it phases out, by 6 cents per dollar of income over $75,000 for each qualifying person, so it is entirely gone by $175,000 and cannot move any break-even above that. It changes the 12 percent answer and leaves 22 and 24 untouched.
Left out on purpose: state income tax, which often favors Traditional if you will retire somewhere cheaper and Roth if you will not; Social Security, which is partly taxable and sits underneath your withdrawals; the employer match, which is always Traditional money regardless of what you choose; Roth IRA income phase-outs, which begin at $153,000 single and $242,000 joint in 2026; IRMAA Medicare surcharges; and ACA premium credits before 65, which reward a low taxable income and therefore favor Roth withdrawals.
This is an estimate for comparing two account types, not tax or financial advice. Nothing you type here is stored, sent or tracked, and it never leaves your browser.