Welcome Federal Credit Union
www.welcomecu.org

Compare Roth 401(k) and Traditional 401(k) Retirement Savings Plans
Calculator

You should explore all of your retirement savings options in order to ensure that you are getting the most returns for a comfortable retirement. Use this calculator helps you compare your possible returns from contributions to a traditional
401(k) savings account versus to a Roth 401(k) account.

Personal Information

Current Age:

Retirement Age:

Life Expectancy:

Current Annual Income:

Wage Growth Percentage:

Contribution Percent:

Investment Information

Pre-Retirement Rate of Return:

Post-Retirement Rate of Return:

Tax Rate During Earning Years:

Tax Rate During Retirement Years:

Current Age

Enter your current age.

Retirement Age

Enter the age at which you wish to retire.

Life Expectancy

Enter the age you expect to live to.

Current Income

Enter your current income.

Wage Growth Percentage

Enter the percentage by which you expect your wages to grow. Typically, 3% - 5% per year.

401(k) Contribution Percentage

Enter the percentage of your income you contribute annually to your 401(k) retirement plan.

Tax Rate During Your Earning Years

Enter your tax rate while you are earning income.

Tax Rate During Your Retirement Years

Enter the tax rate you anticipate during your retirement years. This rate may be lower than during your earning years because you may generate less income from your savings than you earned while working.

Current 401(k) Balance

Enter the current balance of your 401(k) retirement plan.

Employer Match Percentage

Enter the percentage of your income your employer matches.

Pre-Retirement Rate of Return

Enter the rate of return you expect to achieve on your pre-retirement investments.

Post-Retirement Rate of Return

Enter the rate of return you expect to achieve after retirement on your investments.

Inflation Rate

Enter the inflation rate you want to use for withdrawl calculations.

ResultsInformationResources

The calculator generates two Roth 401(k) plans for you to compare. Roth 1 uses the same contribution amount as the traditional 401(k) plan. Roth 1 requires that you pay taxes on contributions which will reduce your annual take home pay by $0. Roth 2 adjusts the contribution amount to include taxes and your take home pay is the same as the traditional 401(k) plan.

Contributions During Working Years

401(k)

Roth 1

Roth 2

Before Tax:

Contribution Taxes:

401(k) Contribution:

Annual After Tax Income:

Annual Income During Retirement Years

Retirement Balance:

Income Before Taxes:

Tax on Income:

After Tax Income:

Annual Contribution Before Tax

Annual contributions for a traditional 401(k), a Roth 401(k) with the same contribution amount and a Roth 401(k) with an adjusted contribution amount such that your annual take home pay is the same as a traditional 401(k).

Contribution Taxes

Annual contribution taxes. Taxes on a traditional 401(k) are deferred. Taxes on Roth 401(k) contributions are paid at the time the contribution is made.

Total Annual Contribution After Tax

The value in "today's dollars" of your monthly retirement income adjusted for inflation.

Annual After Tax Income

Your annual income after taxes and 401(k) contributions have been deducted.

401(k) Balance at Retirement

Balance of your 401(k) savings account when you retire.

Annual Income Before Taxes

Annual income generated by your 401(k) savings plan when you retire and stop making contributions.

Annual Tax on Retirement Income

Annual taxes on income generated by your 401(k) savings plan. Roth 401(k) plans are not taxed during retirement.

Annual After Tax Retirement Income

Annual income after deducting taxes generated by your 401K savings plan when you retire and stop making contributions.

Your Total 401(k) Contributions at Retirement

The total 401(k) contribution you are projected to make during your working years based on your contribution percent.

Welcome Federal Credit Union

Welcome Federal Credit Union is offered as a benefit of your company or organization for both you and members of your immediate family. See website for membership details.

3030 Cornwallis Road
Elion-Hitchings (Main) Building
Research Triangle Park, NC 27709
919-483-1251
www.welcomecu.org

Resources

Tax Foundation Federal Individual Income Tax Rates table.

SmartMoney.com article: Understanding the Roth 401(k).

Path to Investing offers clear, objective, and practical information, including information about traditional and roth 401(k)s.

Send Feedback

Disclaimer