Updated November 2026
Quick answer: with a traditional IRA, you may get a tax deduction now and pay tax when you withdraw. With a Roth IRA, you pay tax now and withdrawals in retirement are tax-free. A Roth is usually better if you expect your tax rate to be higher in retirement; a traditional IRA is usually better if you expect it to be lower.
Key differences
| Traditional IRA | Roth IRA | |
|---|---|---|
| Tax break | Contributions may be tax-deductible now | No deduction now |
| Withdrawals in retirement | Taxed as income | Tax-free if you meet the rules |
| 2026 contribution limit | $7,500 ($8,600 if 50 or older) | $7,500 ($8,600 if 50 or older) |
| Income limits to contribute | None (but the deduction can phase out) | Phases out at $153,000–$168,000 (single) and $242,000–$252,000 (married filing jointly) |
| Required minimum distributions | Yes, from age 73 (75 if born in 1960 or later) | None during your lifetime |
| Early access to contributions | Penalties may apply | Contributions can be withdrawn anytime |
The $7,500 limit is shared: it's the total you can put into all your IRAs, traditional and Roth, in 2026. If you or your spouse has a workplace retirement plan, your traditional IRA deduction phases out at higher incomes ($81,000–$91,000 for single filers in 2026).
Which comes out ahead?
Example: you contribute $7,500, it grows at 7% a year for 30 years to about $57,092, and with the traditional IRA you also invest the tax you saved upfront. Simplified results after tax at withdrawal:
| Tax rate now vs in retirement | Roth IRA | Traditional IRA | Better choice |
|---|---|---|---|
| 22% now, 12% in retirement | $57,092 | $62,801 | Traditional |
| 22% now, 22% in retirement | $57,092 | $57,092 | Tie |
| 12% now, 22% in retirement | $57,092 | $51,383 | Roth |
| 24% now, 24% in retirement | $57,092 | $57,092 | Tie |
When your tax rate stays the same, the two are roughly equal. The difference comes down to whether your tax rate is higher now or later.
Plan your retirement savings →
Who should consider each
- Roth IRA: younger savers early in their careers, people in low tax brackets now, and anyone who wants tax-free income and flexibility in retirement.
- Traditional IRA: people in high tax brackets now who expect lower income in retirement, and anyone who needs the deduction today.
- Both: many people split contributions to diversify their future tax situation.
Rules have details and exceptions, so consider checking with a tax professional. See how your savings could grow with the compound interest calculator, and compare with your workplace plan using the 401(k) calculator.
Frequently asked questions
What is the IRA contribution limit for 2026?
$7,500, or $8,600 if you're 50 or older. The limit applies to your traditional and Roth IRAs combined.
Can I contribute to a Roth IRA if I earn too much?
Direct Roth contributions phase out at $153,000 to $168,000 for single filers and $242,000 to $252,000 for married couples filing jointly in 2026. Some people use a "backdoor Roth" conversion instead; check with a tax professional.
Is a Roth or traditional IRA better?
A Roth is usually better if you expect a higher tax rate in retirement, and a traditional IRA if you expect a lower one. If you're unsure, splitting between them is reasonable.
Can I have both a Roth IRA and a traditional IRA?
Yes, but your total contributions across both can't exceed the yearly limit.