Skip to main content
Home

Compare saving in a 401(k) versus a Roth 401(k)

In a traditional 401(k), you contribute before taxes and your savings can grow tax free until you take them out in retirement.¹ Roth 401(k) contributions are made after tax, and you can take them out tax free in retirement.² Use our calculator to help you decide what's right for you.

401(k) versus Roth 401(k) 

Both kinds of accounts allow your savings to grow tax free. 

When you save in a traditional 401(k), you contribute money before paying taxes on it. You'll then pay taxes when you take the money out, also known as taking a distribution.

When you save in a Roth 401(k), you contribute money after paying taxes on the amount. When you take the money out in retirement, you won't owe additional taxes.2

Deciding which type of account to save in depends on whether you expect your tax rate to be higher now or in retirement.

Use this calculator to help compare the difference in the two account types.

 

How to use this calculator

Savings tab: Input your current age and annual contribution amount.

Distribution: Input the age you expect to be when you take out your money in retirement, the number of years you expect to receive income from this account, the % you expect your savings rate to be, and the tax rate you expect to pay in retirement.

Accumulation: Input the % you expect your savings rate to be while contributing, and the tax rate you pay now.

1 Ordinary income taxes are due on withdrawal. Withdrawals before the age of 59½ may be subject to an early distribution penalty of 10%. 2 Distributions from Roth accounts must be “qualified” for both the contributions and earnings to be treated as tax free. Certain conditions would apply. See your plan document for more details. All references to tax-free treatment of qualified distributions are intended to refer to the treatment of such distributions at the federal level only. You may want to consult a professional tax advisor regarding any tax issues discussed.

By clicking the CalcXML logo above, you will be redirected to a website that is not affiliated with John Hancock. John Hancock has not been involved in the preparation, nor guarantees the accuracy of the calculations and their results at the unaffiliated sites or the services offered through such site, and therefore takes no responsibility for that content or the services. By making this link available, John Hancock is not endorsing the site owner nor warranting its services.

MGS-P 617530-GE 8/24-617530               MGR0827243753118