Tax treatment comparison
Roth vs Traditional IRA Calculator
Both IRAs grow at same rate.
If ON: Traditional's tax deduction goes into a taxable side fund (15% LTCG drag). If OFF (typical): the savings is spent.
The core trade-off
A Traditional IRA gives you a deduction now and taxes the withdrawal later. A Roth gives you no deduction now and never taxes the withdrawal. If your tax rate is identical in both periods, the two produce exactly the same after-tax result — the arithmetic is symmetrical.
Higher tax rate in retirement → Roth
Same rate → mathematically identical
Because the outcome is symmetrical when rates match, the decision usually turns on what breaks that symmetry — and several things do.
Why a pension pushes you toward Roth
Most people expect a lower tax rate in retirement because their income drops. If you have a defined benefit pension, that assumption is weaker. A 30-year career at a 2.2% or 2.3% multiplier replaces roughly two-thirds of your final salary, and that income is fully taxable and arrives whether you want it or not. Add Social Security if you have it, and required minimum distributions from a 403(b) at 73, and your retirement bracket may not be much below your working one.
The RMD problem is real
Traditional balances become required minimum distributions at 73, whether you need the money or not. Stack forced withdrawals on top of a pension and Social Security and some retirees find themselves in a higher bracket at 75 than at 55. A Roth has no lifetime RMDs at all, which is exactly the flexibility that problem needs.
Traditional deductibility phases out too
People often assume the Traditional IRA has no income limit. There is no limit on contributing, but there is one on deducting, and if you are covered by a workplace plan — which nearly every public employee is — the deduction phases out well below the Roth thresholds.
| Filing status | Full deduction below | No deduction above |
|---|---|---|
| Single / head of household | $81,000 | $91,000 |
| Married filing jointly, you are covered | $129,000 | $149,000 |
| Married filing jointly, only your spouse is covered | $242,000 | $252,000 |
Notice the practical consequence. A single teacher earning $95,000 with a 403(b) gets no deduction from a Traditional IRA at all, but is comfortably under the $153,000 Roth threshold. For that person the Traditional option offers nothing the Roth does not, and the Roth is clearly better.
What else tilts the decision
- Roth contributions are effectively larger. Putting $7,500 into a Roth costs you more after-tax than putting $7,500 into a Traditional, so you are sheltering more real money in the same contribution limit.
- State taxes change in retirement. If you will move from a high-tax state to a no-tax one, Traditional looks better. If the reverse, Roth does.
- Roth has no lifetime RMDs. Traditional IRAs and most workplace plans do, starting at 73.
- Roth inherits better. Heirs generally take distributions tax-free, though most non-spouse beneficiaries must empty the account within ten years.
- Tax rates are a political variable. Nobody knows what brackets will look like in 25 years. Holding some of each is a hedge against being wrong, and that is a perfectly respectable reason to split contributions.
A reasonable default
If you are early in your career and in a lower bracket than you expect to be later, Roth is usually the better bet. If you are at peak earnings in a high bracket and expect a genuinely lower one in retirement, Traditional. If you have a pension that will replace most of your income, lean Roth regardless of your bracket, because your retirement rate is less likely to fall than the standard advice assumes. And if you are genuinely unsure, splitting contributions between the two is not a failure to decide — it is a hedge.
Frequently asked questions
Is a Roth or Traditional IRA better if I have a pension?+
Usually Roth. A pension replaces a large share of your income and is fully taxable, so your retirement tax rate may not be much lower than your working rate. The standard argument for Traditional depends on that rate falling, and a pension weakens it.
Can I deduct a Traditional IRA contribution if I have a 403(b)?+
Only below the income limits. For 2026, if you are covered by a workplace plan the deduction phases out between $81,000 and $91,000 for single filers, and $129,000 to $149,000 for married filing jointly. Above that you can still contribute, but you get no deduction.
Can I contribute to both a Roth and a Traditional IRA?+
Yes, but the $7,500 limit for 2026 ($8,600 if you are 50 or older) applies across both combined, not to each separately.
Do required minimum distributions apply to a Roth IRA?+
Not during the original owner's lifetime. Traditional IRAs require distributions starting at 73. This is one of the strongest practical arguments for the Roth if you already have a pension forcing taxable income.
What if I am not sure which will be better?+
Split your contributions. Holding both gives you the ability to choose which account to draw from in a given year, which is worth something on its own, and it hedges against tax rates moving in a direction you did not expect.
Sources
Every figure on this page comes from one of the following. Where a plan does not publish a number we needed, the page says so rather than guessing.
- IRS Notice 2025-67 — 2026 IRA limits and both sets of phase-out ranges
- IRS — IRA deduction limits — deductibility when covered by a workplace plan
- IRS — Required minimum distributions — RMD age and which accounts are affected
Keep reading
Roth IRA calculator
Check your eligibility against the 2026 income phase-outs.
403(b) and 401(k)
The workplace limits are far larger and worth filling first if matched.
Pension vs 401(k)
How a defined benefit plan changes what your savings need to do.
Combined income
Model your full retirement income including the pension.
Plan data on this page was last checked against the system’s own published material on September 19, 2026. Retirement systems change their rules; if you spot something out of date, tell us.