Roth or Traditional 401(k): Six Households, Every State, and the Move to a No-Income-Tax State

Published 2026-10-28. Tax year 2026 (the return filed in early 2027).

Roth or traditional 401(k): does the state you retire in change the answer?

It turns on two tax rates, the one the contribution saves now and the one the withdrawal pays later, and the state you retire in moves the second. On federal tax alone, traditional won for 3 of 6 households and Roth for 3. Roth won where the withdrawal at 75 is taxed at a higher rate than the pay it came from, often because it also makes more Social Security taxable. State tax shifts the answer by where you work and where you retire: a single earner of $160,000 who works in Oregon and retires to Florida comes out $1,190 ahead with traditional per $10,000, while one who works in Florida and retires to Rhode Island comes out $1,605 ahead with Roth. Across every household, state and path, traditional won 554 of 900 cases.

Roth vs traditional on your own numbers: the Roth IRA calculator
Free: what a contribution grows to, Roth against traditional, at your own tax rates.

The comparison

Each household puts the last $10,000 of its 2026 pay into a 401(k). Traditional (pretax) lowers the wages on the 2026 return by $10,000 (IRC §402(g)); Roth leaves them, and a qualified Roth distribution is tax-free later (IRC §402A). The traditional dollars are taxed when they come out: here, from an IRA in 2046, the year the earner (55 in 2026) turns 75, on top of the household's retirement income below, under the federal law as written for that year with every amount in 2026 dollars (the 2025–2028 senior deduction is gone; the brackets are today's in real terms). With the same growth on both sides and the tax saving invested alongside, traditional wins when the rate it saves now is higher than the rate it pays later; the dollar amounts are for the $10,000 itself, before growth.

Traditional wins on federal tax for 3 of the 6 households; Roth wins for T1, T2, T4. The rate at 75 includes the Social Security the withdrawal makes taxable (IRS Publication 915), which is why a modest retirement income can face a higher rate on its next dollar than the bracket suggests.

Three paths: stay, retire to a no-tax state, or the reverse

A state income tax adds to both sides. If you work in a state with an income tax and retire to one without (Florida here; the engine charges it nothing on these incomes), the deduction saves state tax now and nothing is owed on the withdrawal later, so traditional gains. A state cannot tax a former resident's 401(k) or IRA income after the move (4 U.S.C. §114). The reverse move, from a no-tax state to a taxing one, saves nothing now and costs state tax later. Over the 41 states that tax these wages:

Pennsylvania is left out: it does not exclude 401(k) elective deferrals from taxable compensation (PA Department of Revenue), which the engines here do not model, and it does not tax most retirement distributions. The 9 states that tax none of these wages (Alaska, Florida, New Hampshire, Nevada, South Dakota, Tennessee, Texas, Washington, Wyoming) behave like Florida on both sides.

Every state, single earner of $160,000

Advantage = federal + state tax saved now minus federal + state tax at 75, per $10,000 contributed; positive favours traditional, negative favours Roth.

Related: Catch-up contributions: pretax vs Roth · Moving states in retirement · Roth conversion breakeven by state · 2026 401(k) limits

Download the data

Every case on this page, with its inputs: roth-vs-traditional-401k-by-state-2026.csv (the 6 federal cases) · roth-vs-traditional-401k-by-state-2026-states.csv (the 300 household-state cases, three paths each) · roth-vs-traditional-401k-by-state-2026.json (both, CC0). Dollar amounts in USD; rates as decimals; a positive advantage favours traditional.

Questions

Should I choose a Roth or a traditional 401(k)?

Compare the tax rate the contribution saves now with the rate the withdrawal will pay later. For 3 of the 6 households computed here, traditional wins on federal tax; a single earner of $160,000 saves $2,400 of federal tax now on $10,000 and pays $2,200 on it at 75 on the retirement income assumed.

Is a traditional 401(k) better if I plan to retire in a state with no income tax?

Usually. Working in a state with an income tax and retiring to one without, the deduction saves state tax now and the withdrawal pays none later. For the single $160,000 earner the median gain from retiring to Florida, against staying, is $490 per $10,000 across the taxing states.

Should I use a Roth 401(k) if I live in a no-tax state but will retire in a high-tax state?

It moves the answer toward Roth: nothing is saved in state tax now, and the withdrawal pays state tax later. For the single $160,000 earner, working in Florida and retiring to Rhode Island leaves a traditional advantage of -$1,605 per $10,000.

Is Roth better for lower earners?

Not automatically: it depends on the income in retirement. A single earner of $60,000 saves $1,200 of federal tax now on $10,000 and would pay $1,522 on it at 75 (Roth wins), while a one-earner couple on $70,000 saves $1,200 and would pay $475 (traditional wins), on the retirement incomes assumed here.

Method and sources

Every figure was computed by QuantCalc's open tax engines (federal 2.5.1, state 1.21.2) through the same household module the tax-season calculators run, then recomputed by the C engines behind the federal and state tax APIs, from independently written requests, agreeing to the cent. "Saved now" is the 2026 tax with W-2 wages at full pay (Roth) less the tax with wages $10,000 lower (traditional). "At 75" is the tax on $10,000 more withdrawn from an IRA in 2046, from the federal engine's projection for that year with a CPI factor of 1 and the state's 2026 law. On a joint return the other spouse's wages are on the return as shown. The sources:

• 26 U.S. Code §402(g): limit on exclusion for elective deferrals
• 26 U.S. Code §402A: designated Roth contributions (qualified distributions excluded from income)
• 4 U.S. Code §114: a former state cannot tax the retirement income of a nonresident
• Pennsylvania Department of Revenue: PA Personal Income Tax Guide, Gross Compensation
• Publication 915, Social Security and Equivalent Railroad Retirement Benefits
• 26 U.S. Code § 86
• Rev. Proc. 2025-32: 2026 inflation-adjusted items (incl. One Big Beautiful Bill amendments)
• Public Law 119-21 (One Big Beautiful Bill Act), enrolled text

What is not modelled

• The households, their retirement incomes and the age at withdrawal are illustrations; a lower income in retirement than assumed favours traditional, a higher one favours Roth.
• The comparison is on the contribution itself, before growth, with the same growth on both sides and the tax saving invested alongside. At the contribution limit a Roth dollar shelters more, which this comparison does not count.
• No employer match (a match goes in pretax either way); one employer; wages below the Additional Medicare Tax threshold.
• The state at 75 is priced on its 2026 law. Pennsylvania (which taxes 401(k) deferrals) is excluded. The Indiana and Maryland figures include the county income tax at the engine's default county rate (Indiana 1.75%, Maryland 3.12%); other local income taxes (city and school-district taxes, and county taxes in other states) are not included. This is about 401(k) plans; some states treat 403(b) and 457(b) deferrals differently.
• Future federal law is the law as written today for that year; Congress can change it.

An estimate, not tax advice. These are computed examples for the 2026 tax year from QuantCalc's open tax engines (federal 2.5.1, state 1.21.2). Your own return depends on facts these examples do not include. Check any decision with your tax preparer before acting.

@misc{quantcalc2026rothortraditional401ktheanswerbystateand,
  title  = {Roth or Traditional 401(k)? The Answer by State, and What Retiring to a No-Tax State Changes (2026)},
  author = {{QuantCalc Research}},
  year   = {2026},
  url    = {https://quantcalc.app/research/roth-vs-traditional-401k-by-state-2026/},
  note   = {Accessed <date>}
}