Threshold explorer
Roth or traditional?
Only two numbers really decide this: the rate you'd pay on the money now, and the rate you expect to pay when you take it out.
Your marginal rate today
24%
The rate on your next dollar of income, federal plus state.
Rate you expect in retirement
22%
A guess is fine. Most people land lower, but not all.
Close enough to split
When the rate you pay now and the rate you expect later are similar, the maths is close to a tie. Many people hold some of each so future tax law matters less.
On a $7,500 contribution: Roth costs about $1,800 in tax today; traditional defers it and would owe roughly $1,650 on the same amount at your expected future rate.
A traditional contribution skips tax now and pays it on withdrawal. A Roth contribution pays tax now and skips it later. If both rates were identical, the two would end in exactly the same place — the difference is entirely about which rate is higher.
In practice, people early in a career, in a low-income year, or expecting a higher-earning future tend toward Roth. People at peak earnings, especially in a high-tax state they plan to leave, tend toward traditional. Holding some of each is a legitimate hedge rather than indecision.
This is one decision. See the whole picture.
The same engine runs a short guided journey that puts this decision in order against everything else competing for the money.
Common questions
Get next year's contribution limits when they land
IRA and 401(k) limits are announced once a year and quietly change what your plan should look like. We'll send them when they're published.
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