Can I have both a Roth and Traditional IRA?

Yes, but the combined annual contribution limit is $7,000 ($8,000 if over 50). You can split this between both accounts however you like. Many people contribute to both for tax diversification.

What is the Backdoor Roth strategy?

High earners who exceed the Roth income limit can contribute to a Traditional IRA (non-deductible) and then immediately convert it to a Roth IRA. This is legal and commonly used, though it requires no existing pre-tax IRA balances to avoid the "pro-rata rule" tax complication.

At what age can I withdraw from a Roth IRA?

You can withdraw your contributions (money you put in) at any age with no tax or penalty. Earnings can be withdrawn tax-free after age 59.5, provided the account has been open for at least 5 years. Early withdrawal of earnings before 59.5 incurs a 10% penalty plus income tax.

Should I convert my Traditional IRA to Roth?

Roth conversions make sense when you expect to be in a higher tax bracket in the future, when the market is down (converting at lower values means less tax), or when you have a year with unusually low income. You will owe income tax on the converted amount in the year of conversion.

What happens to my IRA when I die?

Roth IRA: beneficiaries inherit the account tax-free (must withdraw within 10 years for non-spouse beneficiaries). Traditional IRA: beneficiaries pay income tax on all withdrawals. This makes Roth IRAs significantly better for estate planning and wealth transfer.

Updated: 2026-02-07·7 min read

Roth IRA vs Traditional IRA Comparison (2026)

Choosing between a Roth IRA and Traditional IRA is one of the most important retirement decisions. The key question: do you want to pay taxes now (Roth) or later (Traditional)? Your answer depends on your current income, expected retirement income, and tax bracket trajectory.

Roth IRA

Traditional IRA

Head-to-Head Comparison

Feature	Roth IRA	Traditional IRA
Tax on Contributions	After-tax (no deduction)	Pre-tax (tax deductible)
Tax on Withdrawals	Tax-free	Taxed as ordinary income
2026 Contribution Limit	$7,000 ($8,000 if 50+)	$7,000 ($8,000 if 50+)
Income Limit (Single)	$161,000 (phase-out)	No limit (deduction phases out)
Income Limit (Married)	$240,000 (phase-out)	No limit (deduction phases out)
Required Min Distributions	None (during lifetime)	Must start at age 73
Early Withdrawal Penalty	Contributions: no penalty	10% penalty before 59.5
Withdrawal Flexibility	Contributions anytime tax-free	Limited before 59.5
Best For	Lower current tax bracket	Higher current tax bracket
Estate Planning	Tax-free inheritance	Heirs pay income tax

Pay Tax Now or Later?

The fundamental choice: Roth IRAs use after-tax money (you pay tax now, withdraw tax-free later). Traditional IRAs use pre-tax money (you get a tax deduction now, pay tax on withdrawals in retirement). If your tax rate is the same in both periods, the math is identical.

The Roth wins if you expect your tax rate to be higher in retirement (early career, rising income). The Traditional wins if you expect a lower rate in retirement (peak earning years, planning to retire in a low-tax state). For most people under 40, the Roth is likely the better choice.

Income Limits & Eligibility

Roth IRA contributions are limited by income: in 2026, single filers earning over $161,000 (married over $240,000) cannot contribute directly. The "Backdoor Roth" strategy (contribute to Traditional, then convert to Roth) remains available for high earners.

Traditional IRA contributions have no income limit, but the tax deduction phases out for people covered by a workplace retirement plan (single filers $77,000-$87,000 in 2026).

Withdrawal Flexibility

Roth IRAs offer superior withdrawal flexibility. You can withdraw your contributions (not earnings) at any time, for any reason, with no tax or penalty. This makes Roth IRAs a de facto emergency fund backup. After age 59.5, all withdrawals (including earnings) are tax-free.

Traditional IRA withdrawals before age 59.5 generally incur a 10% penalty plus income tax. After 59.5, withdrawals are penalty-free but taxed as ordinary income. Required minimum distributions (RMDs) start at age 73 — forcing you to withdraw and pay taxes even if you do not need the money.

Optimal Strategy

Many financial advisors recommend "tax diversification" — contributing to both Roth and Traditional accounts across your career. This gives you flexibility in retirement to withdraw from the account type that minimizes your tax burden in any given year.

A common approach: max out your employer 401k (Traditional, for the tax deduction), then contribute to a Roth IRA ($7,000/year). This way, you get the immediate tax benefit from the 401k and the long-term tax-free growth from the Roth. Use our retirement calculator to model different scenarios.

The Verdict

Winner: Roth IRA (for most people under 50)

Roth IRA's tax-free growth, no RMDs, and withdrawal flexibility make it the better choice for most people, especially those early in their careers.

Tax-free withdrawals in retirement protect against future tax rate increases.
No required minimum distributions — your money grows tax-free indefinitely.
Contributions can be withdrawn anytime — serves as emergency fund backup.
Traditional IRA may be better for high earners in peak earning years seeking immediate tax deduction.