Agentic RAG vs Traditional RAG in .NET: When to Use Each and What It Costs

Traditional RAG handles simple document retrieval well, answering roughly 75% of typical support queries by embedding a question, fetching relevant chunks, and generating a response. Agentic RAG, by contrast, uses a planning loop with multiple tool calls to handle complex, multi-step queries such as cross-referencing logs, databases, and documentation simultaneously. Key trade-offs include cost — around $0.004 per query for traditional RAG versus $0.038 for agentic — and latency, with p95 response times of 2.1 seconds versus 8.2 seconds respectively. A routing layer that classifies each query and dispatches to the appropriate method can reduce monthly costs from roughly $15,700 to around $4,800 at scale. The recommended 2026 approach is to default to traditional RAG and invoke agentic RAG only when a query demands multiple tools, iterative retrieval, or multi-source reasoning.