Snowballr · Cheat sheet
Roth vs Traditional cheat sheet
The break-even tax bracket and which to pick at each stage.
For: Anyone choosing 401(k) / IRA · Source: snowballr.io/cheat-sheets/roth-vs-traditional
The core question
Will your retirement tax rate be higher or lower than your contribution-year tax rate?
- Higher in retirement → Roth wins (pay low rate now)
- Lower in retirement → Traditional wins (deduct high rate now)
- Same → tie; Roth wins on backdoor/flexibility
When Roth wins
- You are in 10–22% bracket today (likely lower than future)
- You expect to retire with significant income (pension, rentals)
- You want tax-free withdrawals to manage Medicare IRMAA later
- You may move to a higher-tax state in retirement
When Traditional wins
- You are in 32–37% bracket today and will spend modestly in retirement
- You plan to live in a no-income-tax state in retirement
- You need the deduction to reduce AGI for other benefits
2026 limits
| Account | Annual limit | Catch-up (50+) |
|---|---|---|
| IRA (any type) | $7,000 | +$1,000 |
| 401(k) employee | $23,500 | +$7,500 |
| Total 401(k) cap | $70,000 | +$7,500 |
Roth IRA income phase-out
- Single: $150K–$165K MAGI
- Married filing jointly: $236K–$246K
- Above? Use backdoor Roth (non-deductible Trad IRA → convert)
Decision rules
- If unsure, split: half Roth, half Traditional. Reduces regret risk.
- Always capture 401(k) match before Roth IRA — match beats any rate question.
- High earners: prioritize Traditional 401(k) + backdoor Roth IRA combo.
- A Roth conversion in a low-income year (sabbatical, early retire) is gold.