Roth IRA vs. Traditional IRA: Which Should You Pick?
Both a Roth IRA and a traditional IRA are tax-advantaged retirement accounts, and for 2026 they share the same contribution ceiling. The one decision that separates them is when you pay income tax on the money. The rest is detail. (For the official rules, see the IRS pages on Roth IRAs and traditional IRAs.)
The core difference
- Traditional IRA: contributions may be tax-deductible now, the money grows tax-deferred, and you pay ordinary income tax when you withdraw in retirement. You get the tax break today.
- Roth IRA: contributions are made with after-tax dollars (no deduction now), but qualified withdrawals in retirement — including all the growth — are completely tax-free. You get the tax break later.
2026 numbers you need
Per IRS Notice 2025-67:
| 2026 figure | Amount |
|---|---|
| IRA contribution limit (under 50) | $7,500 |
| Catch-up (age 50+) | +$1,100 |
| Roth income phase-out — single / HoH | $153,000–$168,000 |
| Roth income phase-out — married filing jointly | $242,000–$252,000 |
The $7,500 cap is a combined limit across both account types — you can split it, but not double it. A key catch: a Roth IRA has income limits. Earn above the phase-out range and you can't contribute directly (a traditional IRA has no income cap on contributing, only on deductibility).
A simple way to choose
- Lean Roth if you're early in your career or in a relatively low tax bracket now and expect to be in a higher one later. Paying tax now at a low rate to get tax-free growth forever is a strong deal — and Roth IRAs have no required minimum distributions in your lifetime.
- Lean traditional if you're in your peak earning years and a high bracket now, and expect a lower bracket in retirement. The upfront deduction is worth more when your rate is high.
- Can't decide? Many people split contributions to hedge against not knowing future tax rates.
If you also have a workplace plan, coordinate this with your 401(k) — a common order is: capture the full employer match first, then fund an IRA.
The bottom line: Traditional gives you the tax break now and taxes withdrawals later; Roth taxes you now and pays out tax-free later. Younger or lower-bracket savers usually favor Roth; high earners in peak years often favor traditional. The 2026 combined limit is $7,500 ($8,600 if 50+).
This is general education, not personalized tax or financial advice. Tax outcomes depend on your specific situation — confirm with a CPA or licensed advisor before acting.