Roth IRA vs traditional IRA

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

The core difference is when you pay tax. A Roth IRA takes after-tax money in, so you get no deduction the year you contribute, but qualified withdrawals in retirement, both your contributions and everything they earned, come out completely tax free. A traditional IRA works the other way: your contribution may be deductible now, lowering your taxable income for the year, but every dollar you take out in retirement is taxed as ordinary income, including all the growth.

A second difference matters just as much: who is allowed to use each account. A traditional IRA has no income limit on who can contribute, though your deduction can shrink or disappear at higher incomes if you or a spouse also has a workplace retirement plan. A Roth IRA has no such deduction to lose, but it has a firm income ceiling: earn enough, and you cannot contribute to one directly at all.

Can I contribute to both a Roth IRA and a traditional IRA in the same year?

Yes, but the contribution limit is shared, not doubled. For 2026, the combined most you can put into a traditional IRA and a Roth IRA together is $7,500, or $8,600 if you are 50 or older. You can split that however you like, for example $4,000 into a traditional IRA and $3,500 into a Roth IRA, but the two numbers cannot add up to more than the single limit. This is different from a 401(k), which has its own separate limit that does not share space with your IRA limit.

Is my traditional IRA contribution tax deductible?

It depends on two things: whether you (or your spouse) are an "active participant" in a workplace retirement plan, meaning you or your spouse are covered by a 401(k), pension, or similar plan at work, and, if so, your income. If neither you nor your spouse is covered by a workplace plan, your traditional IRA contribution is fully deductible no matter how much you earn. If you are covered, the deduction phases out over a set income range and disappears above it. If you are not covered but your spouse is, a separate, higher-income phase-out range applies to you.

Source: IRS Notice 2025-67, section 219(g) cost-of-living adjustments for 2026.

Worked example. Say you are single, you are covered by a 401(k) at work, and your modified adjusted gross income (MAGI) is $85,000 in 2026. Your income sits $4,000 into the $81,000 to $91,000 phase-out range, which is $10,000 wide, so 40% of the way through it. Under the standard IRS worksheet method (Publication 590-A), you reduce your $7,500 limit by that same 40%, cutting $3,000 from what you can deduct, then round the result up to the next $10 (with a $200 minimum if any deduction survives). Here that leaves a deductible amount of $4,500. You could still contribute the full $7,500 to the traditional IRA, but the remaining $3,000 would be a nondeductible contribution, tracked on IRS Form 8606 so you are not taxed on it again when it comes out.

What are the 2026 income limits for a Roth IRA?

Unlike a traditional IRA's deduction phase-out, the Roth IRA's income limit decides whether you can contribute at all. It is based on modified adjusted gross income (MAGI) and does not depend on whether you have a workplace plan.

Source: IRS Notice 2025-67, section 408A(c)(3) cost-of-living adjustments for 2026.

Below the bottom of your range, you can contribute the full $7,500 ($8,600 if 50 or older) to a Roth IRA. Inside the range, the amount you are allowed to contribute shrinks. At or above the top, you cannot contribute to a Roth IRA directly at all. For the full mechanics and worked income examples, see our Roth IRA explainer.

Roth IRA vs traditional IRA: side by side

Source: IRS Notice 2025-67, IRS "Traditional and Roth IRAs" comparison, and IRS Publication 590-B.

Is a Roth IRA or a traditional IRA better?

Neither wins outright. It comes down to a comparison between your tax rate today and your expected tax rate in retirement, something nobody can know for certain. If you expect to be in a lower tax bracket in retirement than you are now, a traditional IRA's deduction is worth more today than the tax you will eventually owe, which favors traditional. If you expect a similar or higher bracket in retirement, perhaps because you are early in your career, expect income to rise, or think tax rates in general will rise, paying tax now at today's rate and locking in tax-free withdrawals favors Roth. Many savers hedge by holding both, so that some retirement income is taxable and some is not, giving more flexibility to manage taxable income year to year in retirement.

Do required minimum distributions work differently for each?

Yes. A traditional IRA is subject to required minimum distributions (RMDs): starting at age 73, the IRS requires you to withdraw at least a set minimum each year, and those withdrawals are taxed as ordinary income. A Roth IRA has no RMDs during the original owner's lifetime, so the money can keep growing untouched for as long as you want, or pass to an heir. See our RMD explainer for how the required amount is calculated and what the penalty is for missing one.

Can I withdraw money early from a Roth IRA or a traditional IRA?

A Roth IRA is the more forgiving account before age 59½. Because you already paid tax on your contributions, you can withdraw the amount you put in, though not what it earned, at any time, for any reason, tax and penalty free. The earnings portion is different: pulling out growth before age 59½ and before the account has been open five years generally triggers both ordinary income tax and a 10% early withdrawal penalty, unless an exception applies (such as a first home, up to $10,000, or certain medical and education costs).

A traditional IRA offers no equivalent free pass. Any withdrawal before 59½ is added to your taxable income and generally hit with the same 10% penalty, whether it came from your original contribution or from growth, again with a limited set of exceptions. A retirement account is a poor emergency fund either way, but the Roth IRA is the one built to tolerate an emergency without extra cost.

What if my income is too high for a Roth IRA?

You can still get money into a Roth account through a "backdoor Roth": contribute to a traditional IRA, which has no income limit on the contribution itself, and then convert that contribution to a Roth IRA. The conversion is generally not taxable if the traditional IRA held only nondeductible contributions with no other pretax IRA balances, though the pro-rata rule complicates this if you hold other traditional, SEP, or SIMPLE IRA balances. That rule, and the tax mechanics of a conversion, are beyond the scope of this page.

The bottom line

A Roth IRA and a traditional IRA share the same 2026 contribution ceiling, $7,500 combined ($8,600 at 50 or older), and split on one question: pay tax now, or pay it later. Roth means after-tax money in, tax-free money out, a hard income cap to contribute, and no RMDs. Traditional means a possible deduction now, taxed withdrawals later, no income cap to contribute (though the deduction can phase out), and RMDs starting at 73. Neither account is the objectively correct choice. The honest answer is that it depends on a comparison between your tax bracket now and your tax bracket decades from now, which is why many savers use both instead of picking one. See Roth IRA vs 401(k) for how this same trade-off plays out against an employer plan, and the full 2026 contribution limits for every account type at once.