Traditional IRA vs Roth IRA
Traditional and Roth IRAs are tax-advantaged individual retirement accounts, but their tax treatment differs. Understanding when contributions and withdrawals are taxed is a useful starting point.
What is a Traditional IRA?
A Traditional IRA is an individual retirement arrangement where contributions may be tax deductible depending on your circumstances. Investment earnings generally receive tax-deferred treatment, and distributions are generally taxable under the applicable rules.
What is a Roth IRA?
Roth IRA contributions are not deductible. Qualified distributions from a Roth IRA can generally be tax-free when the applicable requirements are met.
| Traditional IRA | Roth IRA | |
|---|---|---|
| Contribution deduction | May be deductible, subject to rules. | Not deductible. |
| Tax treatment of qualified withdrawals | Generally taxable. | Generally tax-free. |
| Income limits | Deduction can be limited in some situations. | Eligibility to contribute can be limited by income. |
2026 IRA contribution limit
For 2026, the total contribution limit across your Traditional and Roth IRAs is generally $7,500, or $8,600 if you are age 50 or older, subject to the applicable rules and compensation limits.
The limit applies across your Traditional and Roth IRAs combined rather than providing a separate $7,500 limit for each account.
Roth IRA income limits
Roth IRA contribution eligibility can be limited by modified adjusted gross income and filing status. For 2026, the IRS lists phase-out ranges that differ by filing status. Check the current IRS guidance before making a contribution if your income is near a threshold.
How to compare the two
The central question is often about tax timing: would you rather potentially receive a tax deduction now under Traditional IRA rules, or contribute after tax and potentially receive tax-free qualified distributions under Roth rules?
There is no single account that is automatically appropriate for every taxpayer. Income, filing status, workplace retirement coverage, tax bracket and retirement plans all matter.