The Core Difference: When You Pay Taxes
Traditional and Roth IRAs differ fundamentally in tax timing. Traditional IRA: you may deduct contributions from taxable income today and pay taxes on withdrawals in retirement. Roth IRA: you contribute after-tax dollars now with no current deduction, but all qualified withdrawals in retirement are completely tax-free including decades of investment growth.
2026 IRA Income and Contribution Limits
Roth IRA eligibility: Single filers phase out at $150,000 to $165,000 MAGI. Married filing jointly: $236,000 to $246,000.
Traditional IRA deductibility (if covered by workplace plan, 2026): Single $79,000 to $89,000 phase-out. Married filing jointly: $126,000 to $146,000.
Above Roth income limits: use the backdoor Roth strategy by contributing to a non-deductible Traditional IRA then converting.
The Backdoor Roth IRA
For earners above Roth income limits: (1) Contribute to a non-deductible Traditional IRA (no income limit on contributions). (2) Convert that Traditional IRA to a Roth IRA. If you have no other pre-tax IRA balances, the conversion is essentially tax-free. The pro-rata rule applies if you have existing pre-tax IRA funds and may trigger taxes on a portion of the conversion.
When Traditional Wins vs When Roth Wins
Traditional IRA tends to win when: you are in a higher tax bracket now than expected in retirement; you need the current deduction to lower your AGI; you plan to retire in a lower-tax state than where you currently live.
Roth IRA tends to win when: you are early in your career in a low tax bracket; you expect tax rates to rise; you want tax-free income in retirement to manage RMDs and Medicare premiums; you want to leave tax-free assets to heirs.
Frequently Asked Questions
Can I contribute to both Traditional and Roth IRA?
Yes, but total contributions to all IRAs combined cannot exceed the annual limit of $7,000 ($8,000 if age 50 or older). You can split the amount between account types however you choose.
Can I convert my Traditional IRA to Roth?
Yes. Roth conversions can be done at any age and any income level. The converted amount is included in your taxable income for the conversion year. No early withdrawal penalty applies regardless of age.
What is the 5-year rule for Roth IRA?
The 5-year rule has two parts: (1) The Roth must be open 5 or more tax years AND you must be 59.5 or older for earnings to be withdrawn tax-free. (2) Each Roth conversion has its own separate 5-year clock for penalty purposes on the converted amount for those under age 59.5.
Can I contribute to an IRA if I have a 401k?
Yes. IRA contributions are independent of 401(k) contributions. The 401(k) may affect Traditional IRA deductibility based on income level, but it never affects Roth IRA eligibility which depends only on income limits.
What are the RMD rules for IRAs?
Traditional IRAs require RMDs starting at age 73. Roth IRAs have no lifetime RMD requirement for the original owner, which is one of their most significant long-term advantages. After death, most non-spouse beneficiaries follow the 10-year rule under the SECURE Act.
Content by Alex Porter | Updated April 2026 | Educational purposes only