Roth vs. Traditional IRA: Withdrawal Tax Comparison

Traditional IRA/401(k) withdrawals are taxed as ordinary income — every dollar withdrawn is added to your taxable income. Roth IRA/401(k) qualified withdrawals are completely tax-free (contributions were made with after-tax dollars).

The tax impact depends on your total income in retirement. Many retirees are in the 12–22% bracket.

Strategic Roth conversions in low-income years before RMDs begin can reduce lifetime taxes significantly. Social Security benefits may be partially taxable (up to 85%) depending on your combined income..