Should I contribute to a Roth or a Traditional account?
The entire question is one comparison: your tax rate now versus your tax rate when you withdraw. A Traditional contribution skips tax today and pays it later; a Roth pays tax today and withdraws free. Everything else is a detail.
Contributing $7,000 a year from 35 to 65, at 24% tax now and 22% in retirement:
Traditional wins. Roth after tax $537,709 vs Traditional after tax $551,859.
Roth wins when
- You expect a higher tax rate in retirement than you pay now
- You are early in your career, when your rate is likely at its lowest
- You want tax certainty — a Roth balance is genuinely yours, with no future tax bill attached
- You want to avoid required minimum distributions on that balance
Traditional wins when
- You are in a high bracket now and expect a lower one in retirement
- The tax deduction today lets you contribute meaningfully more
- You live in a high-tax state now and plan to retire somewhere with lower income tax
The bottom line
When the two rates are close, the difference is small and splitting contributions across both is a reasonable hedge against not knowing future tax law. Certainty about your current rate is worth more than a forecast of your future one.
Run it with your numbers