Side by Side Comparison
Category
Feature
Account Type
Roth IRA
After-tax contributions
Account Type
Traditional IRA
Pre-tax contributions (may be deductible)
Tax on Contributions
Contributions are made with after-tax dollars. No deduction now.
Pay tax now
Pay tax now
Contributions may be tax-deductible depending on income and whether you have a workplace plan.
Possible deduction
Possible deduction
Tax on Growth
Tax-free. All investment growth inside the account is never taxed.
Tax-deferred. Growth is not taxed until you withdraw in retirement.
Tax on Withdrawals
Qualified withdrawals are 100% tax-free. Must be age 59.5 or older and account must be at least 5 years old.
Withdrawals are taxed as ordinary income at your rate in retirement.
2026 Contribution Limit
$7,500 under age 50
$8,600 age 50 and older
Combined limit across all IRAs. Not $7,500 per account.
$8,600 age 50 and older
Combined limit across all IRAs. Not $7,500 per account.
$7,500 under age 50
$8,600 age 50 and older
Same limit shared with Roth. Total across both cannot exceed the annual cap.
$8,600 age 50 and older
Same limit shared with Roth. Total across both cannot exceed the annual cap.
Income Limits to Contribute
Yes. Phase-out begins at $153,000 (single) and $242,000 (married filing jointly). Ineligible above $168,000 / $252,000.
Income restricted
Income restricted
No income limit to contribute. Anyone with earned income can contribute. Deductibility may be limited based on income and workplace plan coverage.
No limit
No limit
Age Limit to Contribute
No age limit. You can contribute at any age as long as you have earned income.
No age limit as of SECURE Act 2.0. You can contribute at any age with earned income.
Required Minimum Distributions (RMDs)
No RMDs during your lifetime. You are never forced to withdraw. Your money can stay invested and grow indefinitely.
No RMDs
No RMDs
RMDs required starting at age 73 (SECURE 2.0). You must take minimum distributions whether you need the money or not.
RMDs at 73
RMDs at 73
Early Withdrawal (before 59.5)
Contributions (not earnings) can be withdrawn at any time, tax and penalty free. Earnings withdrawn early may be subject to taxes and a 10% penalty.
Withdrawals before 59.5 are generally subject to ordinary income tax plus a 10% early withdrawal penalty. Exceptions apply for certain hardship situations.
Withdrawal Flexibility
More flexible. Contributions can be accessed any time without penalty, making it a secondary emergency backup.
Less flexible. Most withdrawals before 59.5 incur penalties. Better treated as locked until retirement.
Best Tax Scenario
You expect to be in a higher tax bracket in retirement than you are today. Pay lower taxes now, withdraw tax-free later.
You are in a higher tax bracket now than you expect in retirement. Deduct today, pay lower taxes on withdrawals later.
Estate Planning
Generally more favorable. No RMDs mean assets can pass to heirs with more time to grow tax-free.
Inherited traditional IRAs are subject to RMD rules and income tax on withdrawals for beneficiaries.
Backdoor Option
High earners above the income limit can use the Backdoor Roth strategy: contribute to a non-deductible Traditional IRA, then convert to Roth. Pro-rata rule applies if you have other pre-tax IRA balances.
Non-deductible contributions are always allowed regardless of income. These create basis that is tracked on IRS Form 8606 and is not taxed again at withdrawal.
2026 Contribution Limits at a Glance
Both Account Types
Under age 50
$7,500
Age 50 and older (catch-up)
$8,600
Catch-up amount (age 50+)
$1,100
Contribution deadline (2026)
Apr 15, 2027
Combined limit (Roth + Traditional)
$7,500 total
Roth IRA Income Phase-Out (2026)
Single / Head of Household (full)
Under $153K
Single / Head of Household (phase-out)
$153K to $168K
Single / Head of Household (ineligible)
Above $168K
Married Filing Jointly (full)
Under $242K
Married Filing Jointly (phase-out)
$242K to $252K
Married Filing Jointly (ineligible)
Above $252K
Roth IRA Eligibility by Income and Filing Status (2026)
Filing Status
MAGI
Roth Contribution
Traditional (Deductible)
Single / Head of Household
Under $153,000
Full
Depends on workplace plan
Single / Head of Household
$153K to $168K
Partial
Depends on workplace plan
Single / Head of Household
Above $168,000
Not Eligible
Yes (non-deductible)
Married Filing Jointly
Under $242,000
Full
Depends on workplace plan
Married Filing Jointly
$242K to $252K
Partial
Depends on workplace plan
Married Filing Jointly
Above $252,000
Not Eligible
Yes (non-deductible)
Married Filing Separately
$0 to $10,000
Partial
Very limited deductibility
Married Filing Separately
Above $10,000
Not Eligible
Yes (non-deductible)
General Scenarios Where One May Make More Sense
Roth IRA
Early in your career
You are likely in a lower tax bracket now than you will be at peak earnings. Paying tax today at a lower rate and growing the account tax-free for decades can be a favorable long-term outcome.
Why it may make sense
Tax rates tend to increase as income grows. Locking in today's lower rate on contributions could mean significant tax-free income in retirement.
Traditional IRA
Peak earning years
If you are in your highest earning years and expect your income to be lower in retirement, a traditional IRA deduction today can reduce your current tax bill meaningfully.
Why it may make sense
Deferring income to a year where you are in a lower bracket is a common tax planning strategy. The deduction now could offset a significant amount of taxes owed.
Roth IRA
You want no RMDs
If you do not need the money in retirement or want to leave a tax-efficient inheritance to heirs, the Roth's lack of required minimum distributions gives your portfolio more flexibility.
Why it may make sense
RMDs from a Traditional IRA can push retirees into higher tax brackets or affect Medicare premium calculations. Avoiding them through a Roth can provide more control.
Traditional IRA
Over Roth income limits
If your income exceeds the Roth IRA phase-out thresholds, a non-deductible Traditional IRA contribution followed by a Roth conversion (Backdoor Roth) may be a viable path depending on your situation.
Why it may make sense
High earners are not permanently locked out of Roth benefits. The Backdoor Roth strategy can provide access, though the pro-rata rule and other factors must be evaluated carefully.
Roth IRA
Uncertain future tax rates
Tax law changes. If you believe tax rates will be higher in the future than they are today, a Roth provides a hedge by locking in today's rates on your contributions.
Why it may make sense
Having tax-free income in retirement gives you more flexibility to manage your taxable income and potentially avoid bracket creep or increased Medicare premiums.
Traditional IRA
No workplace retirement plan
If you do not have access to a 401(k) or other employer plan, a Traditional IRA contribution may be fully deductible regardless of income, making it a straightforward way to reduce taxable income today.
Why it may make sense
Without a workplace plan, the income limits for deductibility do not apply to your own contributions. This can make the Traditional IRA a particularly effective tool.
Disclosure: This guide is for educational and informational purposes only and does not constitute tax advice, legal advice, or a recommendation for any specific account type. IRA eligibility, deductibility, and tax treatment depend on individual circumstances including income, filing status, and access to workplace retirement plans. The scenarios described are general in nature and may not apply to your situation. Contribution limits and income thresholds are based on IRS guidance for 2026 (IR-2025-111). Always consult a qualified tax professional or financial advisor before making decisions about retirement accounts. StratiCo is a registered investment advisor and does not provide tax or legal advice.
Not sure which one fits you?
The right account depends
on your full picture.
StratiCo works with clients to build tailored investment strategies around their specific tax situation, income, and goals. This cheat sheet is a starting point. A real conversation takes it further.