Key takeaways
- A traditional IRA may give you a tax deduction now, and you pay tax when you withdraw. A Roth IRA gives no deduction now, but qualified withdrawals are tax-free.
- The deciding question: is your tax rate higher now or in retirement? If it’ll be lower later, traditional tends to win. If it’ll be higher, Roth tends to win. If it’s the same, they come out even.
- Roth IRAs have income limits for contributing. Traditional IRA deductions phase out at certain incomes if you (or your spouse) have a workplace retirement plan.
- Roth IRAs have no required minimum distributions for the original owner, and your contributions can come out at any time.
Both accounts have the same 2026 contribution limit: $7,500, plus a $1,100 catch-up if you’re 50 or older, shared across all your IRAs. The difference is when you pay tax.
The math that decides it
Say you have $5,000 of pre-tax earnings to save, you’re in the 22% bracket today, and the money grows at 7% a year for 30 years.
- Traditional: you deduct the contribution, so the full $5,000 goes in. It grows to $38,061, and every dollar is taxed as income when you withdraw it.
- Roth: you pay 22% tax first, so $3,900 goes in. It grows to $29,688, and qualified withdrawals are tax-free.
What you keep from the traditional IRA depends on your tax rate in retirement:
| Tax rate when you withdraw | Traditional (after tax) | Roth (after tax) | Better choice |
|---|---|---|---|
| 12% | $33,494 | $29,688 | Traditional |
| 22% (same as now) | $29,688 | $29,688 | Tie |
| 32% | $25,882 | $29,688 | Roth |
At equal tax rates they’re identical, because multiplication doesn’t care about order: paying 22% before growth or after growth leaves the same amount. Everything comes down to comparing your tax rate today with your rate when you withdraw.
When a Roth usually makes sense
- You’re early in your career or in a low-income year, so your bracket is low now and likely higher later.
- You expect higher taxes later, from a bigger income, a pension, large required distributions from other accounts, or tax law changes.
- You want flexibility. Roth contributions can be withdrawn anytime, and there are no required minimum distributions during your lifetime.
- You max out your contributions. Because the limit is the same, $7,500 in a Roth is worth more after tax than $7,500 in a traditional IRA. You’re effectively sheltering more money.
When traditional usually makes sense
- You’re in a high bracket now and expect a lower one in retirement.
- You need the deduction to lower your taxable income this year, for example to qualify for a credit or reduce an income-based student loan payment.
- You’ll retire in a lower-tax state than the one you live in now.
The deduction isn’t always available, though. If you or your spouse is covered by a workplace plan like a 401(k), the deduction phases out at these 2026 modified adjusted gross income (MAGI) ranges:
| Situation | Deduction phases out between |
|---|---|
| Single or head of household, covered by a workplace plan | $81,000–$91,000 |
| Married filing jointly, you’re covered | $129,000–$149,000 |
| Married filing jointly, only your spouse is covered | $242,000–$252,000 |
If neither of you has a workplace plan, the traditional IRA deduction has no income limit.
Roth IRA income limits
You can contribute the full amount to a Roth only below certain incomes. Your allowed contribution phases out across these 2026 MAGI ranges:
| Filing status | Roth contribution phases out between |
|---|---|
| Single or head of household | $153,000–$168,000 |
| Married filing jointly | $242,000–$252,000 |
| Married filing separately (lived with spouse) | $0–$10,000 |
Above the top of the range, you can’t contribute directly. Some people use a “backdoor” Roth (a nondeductible traditional contribution converted to Roth). Watch the pro-rata rule if you have other pre-tax IRA balances.
Withdrawal rules
| Traditional IRA | Roth IRA | |
|---|---|---|
| Withdrawing before 59½ | Taxed as income, plus a 10% additional tax unless an exception applies | Contributions: anytime, tax- and penalty-free. Earnings: may be taxed and penalized |
| Qualified withdrawals | Taxed as ordinary income | Tax-free after 59½ once the account is 5 years old |
| Required minimum distributions | Start at 73 (75 if born in 1960 or later) | None for the original owner |
Don’t have to choose just one
You can split contributions between a Roth and a traditional IRA in the same year, as long as the total stays within the limit. Many people also mix account types across their 401(k) and IRA. Having both pre-tax and Roth money gives you room to manage your taxable income in retirement year by year.
The Roth IRA calculator checks your eligibility at your income and compares both accounts using your own tax rates. For workplace contributions, see the 401(k) calculator and how the employer match works.