TALLIVOMethodology
How the Roth vs Traditional Calculator works
How Tallivo compares the two account types after tax — and why they tie when your tax rate does not change.
The formula
Traditional = C × (1+r)^n × (1 − t_retirement) · Roth = C × (1 − t_now) × (1+r)^n · break-even retirement rate = t_now
Step by step
- Both paths take the same contribution, the same return and the same horizon. The only difference is WHEN the tax applies — at the end for Traditional, at the start for Roth.
- Because those are the same three numbers multiplied in a different order, equal tax rates make the two results identical at every return and every horizon. The engine detects the tie by comparing the RATE INPUTS, not the computed dollars, so a floating-point crumb cannot invent a winner where the difference is mathematically zero.
- The break-even retirement rate therefore needs no search: it is your current marginal rate. Below it Traditional wins, above it Roth, and the size of the gap is the ending balance times the difference between the two rates.
- Marginal-rate options and the annual contribution cap are read from the committed federal tax data rather than hardcoded, so they cannot drift from the rest of the site when rates change.
- The contribution-cap comparison models the Traditional's up-front tax saving as a taxable side account whose GAIN is taxed once at the end. That flatters the side account — a real one also loses something to dividend and distribution tax along the way — so the Roth advantage shown is a floor, not a ceiling.
Assumptions & limitations
- One marginal rate going in and one coming out. Real withdrawals fill the brackets from the bottom, so the effective rate on a Traditional withdrawal is usually LOWER than the marginal rate, which tilts the real answer toward Traditional more than this comparison shows.
- Your retirement tax rate is an INPUT and is never guessed. It depends on future law, withdrawal size, pensions, Social Security and the state you retire to, and a calculator that quietly assumes one is answering a question it invented.
- Ignores state income tax, required minimum distributions, the five-year rule on Roth withdrawals, and the income limits on direct Roth IRA contributions.
- An employer match is always pre-tax and lands in a Traditional account whatever you choose for your own contributions, so it is excluded — the choice is about your money, not the whole account.
- Assumes tax law does not change over the horizon, which over thirty years it certainly will.
Sources
Rates and the contribution cap follow the committed federal tax data; reviewed for the 2026 tax year. Figures are planning estimates, not a loan offer — this is not financial advice.
Think one of these figures is wrong? Tell us and we'll check it — we verify against the primary source, not aggregator tables. How we build and check every calculator is documented in our editorial policy.