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2027 federal tax only

Pre-Tax 401(k) versus Roth for High Earners: What is the Tax Deduction Worth?

Filing status
What counts as household income?

Common examples of ordinary taxable income: W-2 wages, vesting restricted stock units, spread on non-qualified stock option exercises/same-day sales, some disqualifying sales of incentive stock options, distributions from pre-tax IRA/401(k) accounts (including inherited accounts), taxable pension and Social Security benefits, short-term capital gains and some interest and dividends, net income from rental activities (schedule E) and pass-through income from a business (schedule C). Not an exhaustive list. Consult your tax advisor.

See current IRS limits. Anyone with 2026 FICA wages over $155,000 must make catch-up contributions as Roth in 2027.

Pre-tax summary 2027 tax year

Federal tax savings this year
$0
% tax saved on every dollar contributed
0.0%
Net impact of contributions on cash flow
$0

Roth considerations

Consider Roth if your retirement tax bracket will be above
0.0%
In 2027, this equates to regular taxable income greater than
n/a

Compare to your expectation of taxable ordinary income in retirement.

Deciding between pre-tax and Roth depends on more than one year of taxes.

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IMPORTANT DISCLOSURE: HYPOTHETICAL ILLUSTRATION. NOT TAX, LEGAL OR INVESTMENT ADVICE.

This calculator is provided by Darrow Wealth Management for general educational and illustrative purposes only. Results are hypothetical estimates based on the information you enter and a limited set of assumptions at a specific point in time. They will differ from your actual tax situation.

The use of this calculator does not constitute advice of any kind. Nothing in this calculator is tax, legal, accounting or investment advice, or a recommendation to make pre-tax or Roth contributions to any retirement plan. Using this calculator does not create an advisory or client relationship with Darrow Wealth Management. Darrow Wealth Management does not provide tax or legal advice. Consult a qualified tax professional or CPA about your specific situation before making any decision.

Assumptions and limitations. This calculator estimates federal income tax only, using 2027 federal tax brackets and standard deductions published by the IRS. Sources: IRS: 401(k) limit increases to $25,500 for 2027; IRS Notice 2026-66; IRS: 2027 tax inflation adjustments; Rev. Proc. 2026-35; Rev. Proc. 2026-24; SSA 2027 COLA fact sheet. This information is educational and is not tax or legal advice.

Key assumptions and limitations of the calculator:

  • Assumes current tax brackets and income bands remain constant, which will differ from reality
  • All income entered is ordinary income, such as wages
  • Implications for long-term capital gains are not reflected
  • Your contribution is within IRS and plan limits
  • The standard deduction applies. If you itemize, your taxable income, tax bracket and estimated savings will be different
  • Does not account for additional deduction for taxpayers age 65 and older now and in retirement
  • Does not account for state or local income tax
  • Pre-tax 401(k) contributions generally do not reduce Social Security or Medicare taxes
  • Does not consider AMT, Net Investment Income Tax, Additional Medicare Tax or other surtaxes
  • Assumes no tax credits, other deductions or income-based phase-outs. Reducing your income with pre-tax contributions may change deductions and credits that phase out by income, which is not reflected

Results may also vary based on the accuracy of user data inputs. Tax laws, IRS inflation adjustments and their interpretation change, sometimes retroactively, and could materially affect these results.

No warranty; limitation of liability. This calculator is provided “as is” without warranty of any kind, express or implied, including as to accuracy, completeness or fitness for a particular purpose. To the fullest extent permitted by law, Darrow Wealth Management and its personnel are not liable for any loss or damage arising from the use of, reliance on, or inability to use this calculator or its results, including any errors, omissions or misinterpretation. You are solely responsible for your decisions and for confirming your tax situation with a qualified tax professional.

About us. Darrow Wealth Management is a SEC-registered investment adviser. More information, including our Form ADV, is available at adviserinfo.sec.gov and https://darrowwealthmanagement.com/disclosure/

By using this calculator, you acknowledge that you have read this disclosure, understand the limitations, and agree that any output from this calculator does not constitute a relationship with Darrow Wealth Management or financial, legal, tax, or investment advice of any kind.