For most Americans under 40 earning below $80,000, the Roth IRA produces more after-tax retirement wealth. Enter your details to get a personalised recommendation.
📋 Educational tool only. Not financial, tax, or investment advice. Consult a qualified tax professional or financial planner for personalised guidance.
Roth IRA
$890,811
100% tax-free
RecommendedTraditional IRA
$783,914
After retirement tax at 12.0%
50/50 Split
$837,363
Tax diversification
Based on your inputs, Roth IRA produces $106,897 more in after-tax retirement wealth. You pay taxes now at 22.0% and enjoy completely tax-free withdrawals later. With 33 years of tax-free compounding, the Roth advantage is significant at your income level.
Current Marginal Rate
22.0%
Retirement Tax Rate
12.0%
Break-Even Rate
22.0%
Traditional Tax Saving/yr
$1,540
Felix can build a step-by-step contribution plan that coordinates your IRA, 401(k), and HSA to maximise all three simultaneously.
Plan Your IRA Strategy with Felix — Free| Account | Under 50 | 50+ | Income Limit (Single) | Income Limit (MFJ) |
|---|---|---|---|---|
| Traditional IRA | $7,000 | $8,000 | No limit (deduction phaseout applies) | No limit |
| Roth IRA | $7,000 | $8,000 | $150K–$165K phaseout | $236K–$246K phaseout |
| Rate | Single | Married Filing Jointly |
|---|---|---|
| 10% | $0 – $11,925 | $0 – $23,850 |
| 12% | $11,926 – $48,475 | $23,851 – $96,950 |
| 22% | $48,476 – $103,350 | $96,951 – $206,700 |
| 24% | $103,351 – $197,300 | $206,701 – $394,600 |
| 32% | $197,301 – $250,525 | $394,601 – $501,050 |
| 35% | $250,526 – $626,350 | $501,051 – $751,600 |
| 37% | $626,351+ | $751,601+ |
If your income exceeds Roth IRA limits, you can still get money into a Roth through the “backdoor” strategy: contribute to a non-deductible Traditional IRA (there is no income limit for non-deductible contributions), then immediately convert to a Roth IRA. The conversion itself is a taxable event, but if you have no other pre-tax IRA balances, there is nothing to tax (you already paid tax on the contribution).
The pro-rata rule: If you have existing pre-tax Traditional IRA balances, the IRS treats all your Traditional IRAs as one pool. A partial conversion will be taxed proportionally based on pre-tax vs after-tax money in all your IRAs. This is the most common Backdoor Roth pitfall — consult a tax professional.
Traditional IRAs require Required Minimum Distributions (RMDs) starting at age 73 under SECURE Act 2.0. This forces you to withdraw — and pay taxes on — a percentage of your balance each year, whether you need the money or not. Roth IRAs have no RMDs during the owner's lifetime. This means your Roth balance can continue growing tax-free for as long as you live, and can be inherited by beneficiaries who withdraw tax-free (subject to the 10-year rule).
The right choice depends on your current vs expected retirement tax rate. If you expect to be in a higher tax bracket in retirement than today, Roth IRA wins — you pay taxes now at a lower rate and enjoy tax-free withdrawals later. If you expect a lower tax bracket in retirement, Traditional IRA wins — you deduct contributions now at a higher rate and pay less tax on withdrawals. For most Americans in their 20s and 30s, Roth is advantageous because income (and tax rates) tend to rise over a career.
The 2025 IRA contribution limit is $7,000 for both Traditional and Roth IRAs. If you are age 50 or older, you can contribute an additional $1,000 catch-up contribution, for a total of $8,000. This limit applies to the combined total across all your IRAs — you cannot contribute $7,000 to each.
For 2025, single filers can contribute the full amount with MAGI under $150,000. Contributions phase out between $150,000 and $165,000. Married filing jointly: phase-out range is $236,000 to $246,000. Above these limits, you cannot contribute directly to a Roth IRA but can use the Backdoor Roth strategy.
If your income exceeds Roth IRA limits, you can contribute to a non-deductible Traditional IRA (no income limit) and then convert it to a Roth IRA. This is legal and widely used by high earners. Be aware of the pro-rata rule if you have existing pre-tax Traditional IRA balances — the conversion will be partially taxable.
Yes — Traditional IRAs require Required Minimum Distributions (RMDs) starting at age 73 (under SECURE Act 2.0). Roth IRAs have no RMDs during the owner's lifetime. This is a significant Roth advantage for high-net-worth individuals who don't need the money in retirement — it can continue growing tax-free indefinitely and be passed to heirs.
Felix coordinates your IRA, 401(k), HSA, and taxable accounts into one unified retirement strategy. Free download — no financial advice given.
Download Richify — FreeThe right choice depends on your current vs expected retirement tax rate. If you expect to be in a higher tax bracket in retirement than today, Roth IRA wins — you pay taxes now at a lower rate and enjoy tax-free withdrawals later. If you expect a lower tax bracket in retirement, Traditional IRA wins — you deduct contributions now at a higher rate and pay less tax on withdrawals. For most Americans in their 20s and 30s, Roth is advantageous because income (and tax rates) tend to rise over a career.
The 2025 IRA contribution limit is $7,000 for both Traditional and Roth IRAs. If you are age 50 or older, you can contribute an additional $1,000 catch-up contribution, for a total of $8,000. This limit applies to the combined total across all your IRAs — you cannot contribute $7,000 to each.
For 2025, single filers can contribute the full amount with MAGI under $150,000. Contributions phase out between $150,000 and $165,000. Married filing jointly: phase-out range is $236,000 to $246,000. Above these limits, you cannot contribute directly to a Roth IRA but can use the Backdoor Roth strategy.
If your income exceeds Roth IRA limits, you can contribute to a non-deductible Traditional IRA (no income limit) and then convert it to a Roth IRA. This is legal and widely used by high earners. Be aware of the pro-rata rule if you have existing pre-tax Traditional IRA balances — the conversion will be partially taxable.
Yes — Traditional IRAs require Required Minimum Distributions (RMDs) starting at age 73 (under SECURE Act 2.0). Roth IRAs have no RMDs during the owner's lifetime. This is a significant Roth advantage for high-net-worth individuals who don't need the money in retirement — it can continue growing tax-free indefinitely and be passed to heirs.