401(k) Calculator
Traditional vs Roth: see the real paycheck difference.
Traditional vs Roth: The Paycheck Difference
Traditional 401(k): Contributions are pre-tax. Your taxable income drops, so less tax is withheld and your paycheck is larger. You pay taxes when you withdraw in retirement.
Roth 401(k): Contributions are after-tax. Your taxable income stays the same, meaning a smaller paycheck now. But withdrawals in retirement are completely tax-free, including all growth.
Which Should You Choose?
Early career and in a lower tax bracket? Roth is usually the better bet. You lock in today's low rate and let decades of growth compound tax-free. In your peak earning years (24% bracket or higher)? Traditional likely saves you more on a lifetime basis.
Not sure? Many plans let you split between both. A common approach is to contribute enough Traditional to capture your full employer match, then put the rest into Roth. Use Betterment · Try Betterment → to automate your investment strategy alongside your 401(k).
One more factor: if you believe tax rates will be higher in the future, Roth contributions lock in today's rates. If you expect your income to drop in retirement, Traditional lets you defer taxes to a time when your rate should be lower.