Traditional IRA vs Roth IRA

Tax now or tax later? A clear 2026 comparison of traditional and Roth IRAs for retirement.

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Quick answer

The core difference: a traditional IRA gives you a tax break now and is taxed at withdrawal, while a Roth IRA is funded with after-tax dollars and grows tax-free. In 2026, both share a $7,500 contribution limit, but only traditional IRAs require minimum distributions starting at age 73 or 75.

Choosing between a traditional and Roth IRA comes down to when you pay tax and whether you want required withdrawals. Here is the 2026 comparison.

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

Timing of taxes is the heart of it. A traditional IRA contribution may be tax-deductible now, the money grows tax-deferred, and you pay ordinary income tax when you withdraw in retirement. A Roth IRA uses after-tax dollars, so there is no deduction today, but qualified withdrawals in retirement are entirely tax-free. For 2026, both have a $7,500 contribution limit, or $8,600 with the age 50 catch-up. The general rule of thumb: choose traditional if you expect a lower tax bracket in retirement, and Roth if you expect the same or higher.

How do RMDs and income limits differ?

Roth IRAs have no required minimum distributions during your lifetime, so the money can keep growing tax-free and pass to heirs efficiently. Traditional IRAs require RMDs starting at age 73 for those born 1951 through 1959, and age 75 for those born in 1960 or later, with a 25% penalty for missed distributions (10% if corrected promptly). Roth contributions have income limits, phasing out at $153,000 for singles and $242,000 for couples in 2026, while anyone can contribute to a traditional IRA, though deductibility may be limited if you have a workplace plan.

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Frequently asked questions

Which is better, a traditional or Roth IRA?+

Neither is universally better. Choose a traditional IRA if you expect a lower tax bracket in retirement, since you get the deduction now. Choose a Roth if you expect equal or higher future taxes, want tax-free withdrawals, and prefer no required minimum distributions during your lifetime.

Can I have both a traditional and Roth IRA?+

Yes. You can own both, but your total contributions across all IRAs cannot exceed the annual limit, which is $7,500 in 2026 or $8,600 if you are 50 or older. Splitting contributions can balance tax flexibility now and in retirement.

Does a Roth IRA have required minimum distributions?+

No. Roth IRAs have no required minimum distributions during the original owner's lifetime, so the money can grow tax-free indefinitely. Traditional IRAs do require distributions starting at age 73 or 75, depending on your birth year, with steep penalties for missing them.

What are the 2026 income limits for each IRA?+

Roth IRA contributions phase out between $153,000 and $168,000 for singles and $242,000 and $252,000 for married couples filing jointly in 2026. Traditional IRAs have no income limit to contribute, though the deduction can phase out if you or a spouse has a workplace retirement plan.

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