What is the difference between a traditional IRA and a Roth IRA?

A traditional IRA lets you deduct contributions now (subject to income limits) and pay taxes on withdrawals in retirement. A Roth IRA uses after-tax dollars — no upfront deduction, but withdrawals in retirement are 100% tax-free including all growth.

Which is better, a traditional IRA or Roth IRA?

A Roth IRA is generally better if you are young or in a low tax bracket now, expect higher taxes in retirement, or want no required minimum distributions. A traditional IRA is better if you are in a high bracket today and expect lower taxes in retirement, or need the deduction to reduce current taxable income.

What are the income limits for a Roth IRA in 2026?

For 2026, single filers with MAGI below $150,000 can make a full Roth IRA contribution. The ability to contribute phases out between $150,000 and $165,000. For married filing jointly, the phase-out is $236,000 to $246,000. Above those limits, use a backdoor Roth IRA strategy.

Do traditional IRAs have required minimum distributions?

Yes. Traditional IRA owners must begin taking required minimum distributions (RMDs) by April 1 of the year after they turn 73 under the SECURE 2.0 Act. Roth IRAs do not have RMDs during the account owner's lifetime, making them useful for estate planning.

Can I contribute to both a traditional and Roth IRA?

Yes, but your total combined contributions to all IRA accounts cannot exceed $7,000 per year ($8,000 if age 50 or older) in 2026. You can split the $7,000 between the two account types in any proportion you choose.

What is a backdoor Roth IRA?

A backdoor Roth IRA is a two-step strategy for high earners who exceed Roth IRA income limits. You contribute to a non-deductible traditional IRA (no income limit), then immediately convert it to a Roth IRA. This effectively bypasses the income cap on direct Roth contributions.

Traditional IRA vs Roth IRA 2026: Which Is Right for You?

The 2026 IRA contribution limit is $7,000 ($8,000 if you are 50 or older). Your key decision is whether to put those dollars into a traditional IRA for a tax break today, or a Roth IRA for tax-free income in retirement.

Quick Comparison

Feature	Traditional IRA	Roth IRA
2026 contribution limit	$7,000 ($8,000 if 50+)	$7,000 ($8,000 if 50+)
Income limit to contribute	None	$165,000 single / $246,000 MFJ (phase-out)
Tax deduction	Yes (if eligible)	No
Tax on growth	Deferred	Tax-free
Tax on withdrawals	Ordinary income tax	Tax-free (qualified)
Required minimum distributions	Yes, starting at age 73	No
Penalty-free withdrawal of contributions	No (10% penalty + tax before 59½)	Yes, any time
Best for	High earners today expecting lower rate in retirement	Lower earners today or those expecting higher future rates

How Contributions Are Taxed

Traditional IRA: Deduction Now, Tax Later

Contributing to a traditional IRA may reduce your taxable income today. However, the deductibility depends on whether you (or your spouse) have a workplace retirement plan and your income:

If you have NO workplace retirement plan: Contributions are fully deductible regardless of income.

If you DO have a workplace retirement plan (2026 phase-out ranges):

Filing Status	Full Deduction	Partial Deduction	No Deduction
Single / Head of Household	Under $79,000	$79,000–$89,000	Over $89,000
Married Filing Jointly (you have plan)	Under $126,000	$126,000–$146,000	Over $146,000
MFJ (spouse has plan, you don’t)	Under $236,000	$236,000–$246,000	Over $246,000

Worked example: A single filer earning $75,000 with a 401(k) at work contributes $7,000 to a traditional IRA. The full $7,000 is deductible. At the 22% bracket, that saves $1,540 in federal taxes this year.

Roth IRA: No Deduction Now, Tax-Free Forever

Roth IRA contributions use after-tax dollars. You get no deduction today, but your money grows completely tax-free. Qualified withdrawals in retirement — both your contributions and all accumulated gains — are tax-free.

2026 Roth IRA income phase-out:

Filing Status	Full Contribution	Partial	Ineligible
Single / HOH	Under $150,000	$150,000–$165,000	Over $165,000
Married Filing Jointly	Under $236,000	$236,000–$246,000	Over $246,000
Married Filing Separately	$0	$0–$10,000	Over $10,000

Worked example: A 30-year-old contributes $7,000 to a Roth IRA every year for 30 years. At 6% average annual growth, the account grows to approximately $587,000. Every dollar of that $587,000 can be withdrawn tax-free in retirement.

RMDs: The Biggest Long-Term Difference

Traditional IRAs require you to begin taking required minimum distributions (RMDs) by April 1 of the year after you turn 73. You must withdraw a minimum amount each year based on your account balance and life expectancy, and pay ordinary income tax on every dollar.

Roth IRAs have no RMDs during your lifetime. Your balance can continue compounding indefinitely, and you can pass the full account to heirs who may also enjoy tax-free withdrawals. This makes Roth IRAs a powerful estate planning tool.

Early Withdrawal Rules

Situation	Traditional IRA	Roth IRA
Withdraw contributions before 59½	10% penalty + income tax	No penalty, no tax (any time)
Withdraw earnings before 59½	10% penalty + income tax	10% penalty + tax (if not “qualified”)
Withdraw after 59½ (5-year rule met)	Income tax only	Completely tax-free

Roth IRA contributions (not earnings) can always be withdrawn penalty-free at any age. This makes Roth accounts more flexible as a backup emergency reserve.

Who Should Choose a Traditional IRA?

You are in the 24% bracket or higher and expect a lower bracket in retirement
You want to reduce taxable income this year for other eligibility purposes
You earn too much for a Roth IRA and don’t want to do a backdoor conversion
You are close to retirement and have limited time for tax-free Roth growth

Who Should Choose a Roth IRA?

You are in the 10% or 12% bracket — paying tax now is cheap; lock it in
You are under 40 with decades of potential tax-free compound growth
You want no RMDs and maximum flexibility in retirement
You want the ability to withdraw contributions as a flexible emergency fund
You expect tax rates to rise over your saving horizon

The Backdoor Roth IRA Strategy

High earners above the Roth income limits can still contribute indirectly:

Contribute up to $7,000 to a traditional IRA (no income limit, but non-deductible if you also have a workplace plan)
Immediately convert the traditional IRA to a Roth IRA
Pay taxes only on any gains between contribution and conversion (usually minimal if done quickly)
All future growth is now tax-free

This strategy works best when you have no other pre-tax IRA balances (to avoid the “pro-rata rule” complication). See the full IRA guide for step-by-step instructions.

Written by WealthVieu

WealthVieu researches and writes data-driven personal finance guides using primary sources including the IRS, Bureau of Labor Statistics, Federal Reserve, and Census Bureau.

The content on Wealthvieu is for informational purposes only and should not be considered financial, tax, or investment advice. Consult a qualified professional before making financial decisions. Full disclaimer · Editorial policy