What is the IRA contribution limit for 2026?

The combined contribution limit for Traditional and Roth IRAs in 2026 is $7,500 per person ($8,600 if age 50 or older). You can split this across both account types, but the total cannot exceed $7,500.

Which is better — Traditional IRA or Roth IRA?

If you expect to be in a lower tax bracket in retirement than you are now, a Traditional IRA gives you a bigger benefit (deduct now, pay less later). If you expect a higher tax rate in retirement — or want flexibility and no RMDs — the Roth IRA is usually better. When unsure, splitting contributions between both is a solid hedge.

Does a Traditional IRA have required minimum distributions?

Yes. You must begin taking RMDs from a Traditional IRA starting at age 73 (age 75 for those who turn 74 after December 31, 2032). Roth IRAs are exempt from RMDs during the owner's lifetime.

Is a Traditional IRA contribution always tax-deductible?

Not always. If you (or your spouse) are covered by a workplace retirement plan, your deduction phases out at certain income levels. For 2026, single filers covered by a workplace plan see deductibility phase out between $81,000 and $91,000 MAGI.

Traditional IRA vs Roth IRA 2026: Full Comparison

Q: Can I contribute to both a Traditional IRA and a Roth IRA?

Yes, but the combined contributions to both accounts cannot exceed $7,500 ($8,600 if 50+) for 2026. For example, you could put $4,000 in a Traditional IRA and $3,500 in a Roth IRA.

Side-by-Side

Full Feature Comparison

Both IRAs share the same contribution limit — the differences are all about taxes.

Feature	Traditional IRA	Roth IRA
2026 Contribution Limit Combined across both IRA types	$7,500 (shared limit)
Catch-Up Contribution (50+)	+$1,100 (shared)
Who Can Contribute	Anyone with earned income (no age limit)	Anyone with earned income & eligible MAGI
Tax on Contribution	Deductible if income qualifies Non-deductible if too high income	After-tax — no deduction
Tax on Qualified Withdrawal	Ordinary income tax	Tax-free ✓
Income Limit to Contribute	✓ None	Phase-out $153,000–$168,000 (Single)
Deduction Phase-Out (Single, w/ plan)	$81,000–$91,000	N/A — no deduction
Deduction Phase-Out (MFJ, w/ plan)	$129,000–$149,000	N/A
Early Withdrawal (before 59½)	10% penalty + full income tax	Contributions: anytime penalty-free Earnings: 10% penalty + taxes
Required Minimum Distributions	Age 73 (age 75 in 2033)	Never ✓
Conversion to Roth	Can be converted (Roth conversion) — taxes due on pre-tax amount	Already Roth
5-Year Rule	N/A for traditional withdrawals	Earnings must meet 5-yr rule for tax-free withdrawal
Impact on FAFSA	Both IRA types excluded from FAFSA asset calculations

Tax Deduction Rules

Traditional IRA Deduction Phase-Out — 2026

If you or your spouse are covered by a workplace retirement plan, your Traditional IRA deduction may be limited.

Single / HoH — covered by workplace plan $81,000 – $91,000

MFJ — contributing spouse covered by workplace plan $129,000 – $149,000

MFJ — non-covered spouse contributing (spouse IS covered) $242,000 – $252,000

Not covered by workplace plan Fully deductible at any income ✓

Note: Non-deductible Traditional IRA contributions are always allowed (no income limit). Track them on IRS Form 8606 to avoid double taxation on withdrawal.

Strengths & Weaknesses

Pros & Cons

🏦 Traditional IRA

Pros

Potential tax deduction reduces taxable income today
No income limit to contribute (only deductibility is limited)
Good if you're in a high bracket now and expect lower rates in retirement
Can reduce current-year MAGI, potentially unlocking other deductions
Can be converted to Roth during low-income years (strategic Roth conversions)

Cons

All withdrawals taxed as ordinary income in retirement
RMDs start at age 73 — you're forced to take money out
Non-deductible contributions require Form 8606 tracking to avoid double-tax
Less flexible for early withdrawal (full penalty + taxes)

✅ Roth IRA

Pros

Qualified withdrawals are 100% tax-free in retirement
No RMDs — your money can compound indefinitely
Contributions (not earnings) accessible anytime without penalty
Tax-free withdrawals don't trigger Medicare IRMAA or Social Security taxation
Excellent estate planning — heirs enjoy tax-free inherited Roth IRA
Great if you're in a low bracket now

Cons

Income limit — phases out above $153,000 (single) in 2026
No upfront tax deduction — opportunity cost if in a high bracket
Earnings subject to 5-year rule for penalty-free withdrawal

Decision Guide

Which IRA Is Right for You?

Choose Traditional IRA if…

You're in the 24% bracket or higher now and expect to be in 22% or lower in retirement
You need a current-year tax deduction to lower MAGI
Your income exceeds Roth IRA limits and you don't want to do a backdoor Roth
You're planning strategic Roth conversions during lower-income retirement years
You want to reduce this year's tax bill as much as possible

Choose Roth IRA if…

You're in the 12% or 22% bracket and expect higher rates in retirement
You're early in your career with decades of tax-free compounding ahead
You want flexibility to withdraw contributions penalty-free if needed
You're concerned about future tax rate increases
You want to minimize RMDs and have control over your distributions
You want a tax-free inheritance for heirs

💡 The Roth conversion strategy: If you have a large Traditional IRA but low income in a given year (early retirement, sabbatical, business loss), consider converting some to Roth. You pay tax at the current lower rate to lock in tax-free growth forever.

FAQ

Common Questions

Can I contribute to both a Traditional IRA and a Roth IRA in the same year?

Yes, but the combined total cannot exceed $7,500 in 2026 ($8,600 if 50+). For example, $4,000 Traditional + $3,500 Roth = $7,500 total, which is allowed.

What if my income is too high for a Roth IRA?

Use the backdoor Roth strategy: make a non-deductible Traditional IRA contribution, then convert it to a Roth IRA. There are no income limits on Roth conversions. Be aware of the pro-rata rule if you have other pre-tax IRA funds.

What is a non-deductible IRA contribution?

If your income is too high to deduct a Traditional IRA contribution, you can still make a non-deductible contribution (using after-tax dollars). You must file Form 8606 each year to track this basis, so you don't pay taxes on it again when you withdraw. These after-tax contributions are the starting point for backdoor Roth conversions.

Are RMDs required for Traditional IRAs?

Yes. Traditional IRAs require RMDs starting at age 73 (age 75 for those born after December 31, 1958, effective 2033). Roth IRAs are exempt from RMDs for the original owner. Inherited Roth IRAs have different rules for non-spouse beneficiaries.

What is the Roth IRA 5-year rule?

To withdraw Roth IRA earnings tax-free and penalty-free, two conditions must be met: (1) you're at least 59½, and (2) the Roth IRA has been open at least 5 years. The 5-year clock starts January 1 of the first year you made any Roth IRA contribution. Roth IRA contributions can always be withdrawn without penalty.