The same investment grows differently in three account types. See the after-tax result of each.
Compares the after-tax ending value of the same contribution grown in a taxable, tax-deferred, and Roth account.
A taxable account is funded with after-tax dollars and its growth faces tax along the way, a tax-deferred account grows untaxed but withdrawals are taxed as ordinary income, and a Roth grows and is withdrawn tax-free after the initial after-tax contribution. The winner often depends on whether your tax rate in retirement is higher or lower than it is today. This tool applies your rate assumptions to a single lump sum over a set number of years.
Because tax-deferred and Roth accounts move the tax to different points in time, the comparison hinges on the rate now versus the rate later that you enter. When the retirement rate is lower, deferral tends to look better, and when it is higher, the Roth's tax-free withdrawals tend to win. The model uses simple annual compounding and does not include contribution limits, fees, or required distributions.
It depends heavily on your tax rate now versus in retirement, plus how long the money grows. Lower future rates favor deferral, while higher future rates favor the Roth.
No, it grows whatever amount you enter and ignores annual limits, required minimum distributions, and fees. Real accounts have caps that may change the picture.
No, the taxable case uses simplified assumptions about how and when growth is taxed. Actual taxable outcomes depend on turnover, dividends, and capital gains timing.
See the exact formula and a worked example on our methodology page.