401k Calculator - Free Traditional vs Roth 401k Comparison Tool
401k Account Type
Key Difference: Traditional = pre-tax contributions (reduce taxable income now). Roth = after-tax contributions (tax-free growth).
Basic Information
2024 limit: $23,000 (under 50) | $30,500 (50+)
Ready to Calculate
Enter your 401k information and click "Calculate 401k Retirement" to see your retirement projection and Traditional vs Roth comparison.
401k Retirement Planning Guide
Understanding 401k Plans
A 401k is an employer-sponsored retirement savings plan that offers tax advantages. Named after section 401(k) of the IRS code, it allows you to save and invest for retirement with pre-tax or after-tax dollars, depending on account type.
Key features: Tax-advantaged growth, employer matching contributions, automatic payroll deductions, investment options (stocks, bonds, target-date funds), portability when changing jobs, penalties for early withdrawal before age 59½, required minimum distributions (RMDs) starting at age 73.
Traditional vs Roth 401k
• Tax-deferred growth (no taxes until withdrawal)
• Withdrawals taxed as ordinary income
• Best if: High tax bracket now, lower in retirement
• Tax-free growth forever
• Withdrawals completely tax-free in retirement
• Best if: Low tax bracket now, higher in retirement
Frequently Asked Questions
What is the difference between Traditional and Roth 401k?
Traditional 401k: Contributions are pre-tax (reduce taxable income now), investments grow tax-deferred, withdrawals taxed as ordinary income in retirement. Roth 401k: Contributions are after-tax (no immediate tax benefit), investments grow tax-free, qualified withdrawals are completely tax-free in retirement. Key decision factor: Pay taxes now (Roth) or later (Traditional). Choose Roth if: You're in low tax bracket now, expect higher bracket in retirement, want tax-free income in retirement, are young with decades to grow tax-free. Choose Traditional if: You're in high tax bracket now, expect lower bracket in retirement, want immediate tax deduction, need to reduce current taxable income. Most experts recommend: Split contributions between both for tax diversification.
How much should I contribute to my 401k?
Minimum: Contribute enough to get full employer match (typically 3-6% of salary) - this is free money! Recommended: 15% of gross income for retirement (including employer match). Maximum 2024 limits: $23,000 if under 50 years old, $30,500 if 50 or older (includes $7,500 catch-up). Ideal progression: 1. Contribute to get full employer match, 2. Pay off high-interest debt, 3. Build emergency fund (3-6 months expenses), 4. Max out Roth IRA ($7,000 in 2024), 5. Max out 401k ($23,000), 6. Invest in taxable accounts. Reality check: Median 401k contribution is only 6% - most Americans save far too little. Even 10% is better than 6%. Start where you can, increase 1% annually until you reach 15%+.