Traditional and Roth individual retirement accounts are both solid options for retirement savings. A Roth IRA offers tax advantages when you withdraw your funds, while contributions to a traditional IRA are tax-deferred until you take distributions. Comparing both IRA options can help you make an informed decision.
ROTH BASICS
Contributions to a Roth IRA are made with after-tax dollars. That means you won’t get a tax deduction for your contributions. However, the money in your account grows tax-free. Withdrawals are also tax-free, providing you with a tax-free income stream in retirement. The maximum contribution to Roth and traditional IRAs in 2026 is $7,500, or $8,600 for people aged 50 or older.
NO REQUIRED DISTRIBUTIONS
Traditional IRAs require minimum distributions from your account once you reach age 73. In contrast, a Roth IRA has no minimum distribution requirement—ever. If you don’t need the funds in your account, you can leave it untouched, so it continues to grow tax-free during your lifetime and then pass the Roth IRA tax-free to your heirs.
INCOME LIMITS
You cannot contribute to a Roth IRA if your modified adjusted gross income (MAGI) exceeds the applicable limits. In 2026, the income limit for single and head-ofhousehold filers to contribute the maximum amount is $168,000. Married joint filers can contribute the full amount if their MAGI is $252,000 or less. THE FIVE-YEAR RULE Contributions to a Roth IRA can be withdrawn at any time, but earnings distributed before age 59-1/2 may be subject to a 10% penalty and income tax unless you meet an exception. After age 59-1/2, you can withdraw both contributions and earnings without penalty once the account has been open for at least five tax years.
HOW TO DECIDE
Consider a Roth IRA if you expect to be in a higher tax bracket in retirement. Because you’ll pay taxes on the conversion, it’s usually best to do it when your income dips. Talk with your trusted advisors so you can make an informed decision together.