The Roth IRA vs Traditional IRA choice comes down to one variable: when you pay tax. A Traditional IRA gives you a deduction today and taxes the money on the way out in retirement. A Roth IRA taxes you now at your current marginal rate (see the 2026 federal tax brackets) and lets you withdraw the entire balance, including all investment growth, completely tax-free after age 59½. For 2026 the contribution limit is $7,500 for both, with an extra $1,100 catch-up at age 50+. What changes is the income phase-out — Roth eligibility and Traditional deductibility both depend on your modified adjusted gross income (MAGI) and whether you (or your spouse) are covered by a workplace plan.
Model both choices side by side
Project the after-tax retirement balance from a Roth versus Traditional IRA at any contribution rate, return, and tax bracket.
Open Retirement Calculator →2026 IRA Contribution Limits
| Item | 2025 | 2026 |
|---|---|---|
| Annual contribution (under 50) | $7,000 | $7,500 |
| Age 50+ catch-up | $1,000 | $1,100 |
| Total (50+) | $8,000 | $8,600 |
Source: IRS Notice 2025-67. Limits apply across all your IRAs combined (Traditional + Roth + Rollover).
2026 Roth IRA Income Phase-Outs
If your MAGI is below the lower bound you can make a full Roth contribution. If it falls within the range your contribution is reduced. Above the upper bound you cannot contribute directly to a Roth IRA at all.
| Filing Status | Phase-Out Range (2026) | Above This = $0 Direct Contribution |
|---|---|---|
| Single / Head of Household | $153,000 – $168,000 | $168,000 |
| Married Filing Jointly | $242,000 – $252,000 | $252,000 |
| Married Filing Separately (lived with spouse) | $0 – $10,000 | $10,000 |
Source: IRS Notice 2025-67. The MFS range does not adjust for inflation.
2026 Traditional IRA Deduction Phase-Outs
A Traditional IRA contribution is always permitted (subject only to having earned income), but the tax deduction phases out when you or your spouse has a workplace retirement plan.
| Situation | Phase-Out Range (2026) |
|---|---|
| Single, covered by workplace plan | $81,000 – $91,000 |
| MFJ, contributor covered by workplace plan | $129,000 – $149,000 |
| MFJ, contributor not covered but spouse is | $242,000 – $252,000 |
| Neither spouse covered | No income limit on deduction |
Source: IRS Notice 2025-67. "Covered by a workplace plan" means your W-2 has the retirement-plan box checked.
Side-by-Side: Roth vs Traditional
| Feature | Traditional IRA | Roth IRA |
|---|---|---|
| Tax treatment | Deduct now, pay tax in retirement | Pay tax now, withdraw tax-free after 59½ |
| Income limit to contribute | None (deduction may phase out) | $168k single / $252k MFJ |
| Required Minimum Distributions | Start at age 73 (75 after 2033) | None during owner's lifetime |
| Early withdrawal of contributions | Taxed + 10% penalty under 59½ | Contributions (not earnings) can be withdrawn anytime tax/penalty-free |
| Best fit (rule of thumb) | Higher current bracket than retirement | Same or lower current bracket than retirement |
The One-Line Rule for Choosing
If you expect a lower tax rate in retirement, choose Traditional. If you expect the same or higher rate, choose Roth.
That sounds obvious until you try to estimate your future tax rate. A few honest signposts:
- Roth typically wins if you are early in your career (today's bracket is low), if you expect significant pension or Social Security income, or if you simply value tax certainty over optimization.
- Traditional typically wins if you are in your peak earning years (32–37% bracket) and expect to retire in a low-tax state with modest income.
- Split the difference if your future is genuinely uncertain. Many planners suggest contributing pre-tax to a 401(k) for the deduction and then funding a Roth IRA for tax diversification.
A worked example: a 30-year-old in the 22% bracket who contributes $7,500/year for 35 years at a 7% real return ends with about $1.04M in either account. With Traditional they owe income tax on every withdrawal; with Roth they owe nothing. If their retirement bracket is 22%, they end up in exactly the same after-tax place. If their retirement bracket is 12%, Traditional wins. If retirement is at 24%, Roth wins. The decision is genuinely close in most cases.
Compare both growth paths with your numbers:
Open Retirement Calculator →Backdoor Roth IRA — When Direct Contributions Are Off the Table
For high earners above the Roth phase-out, the "backdoor Roth" remains legal as of 2026. You contribute up to $7,500 (or $8,600 at 50+) to a nondeductible Traditional IRA, then convert it to a Roth IRA. The conversion itself triggers no tax because the contribution was nondeductible.
The catch is the IRS pro-rata rule. If you have any pre-tax balance in any Traditional, SEP, or SIMPLE IRA, the conversion is taxed proportionally on the combined balance. Many high earners with a rollover IRA from a former 401(k) get an unwelcome tax bill. The clean solution is to roll the pre-tax IRA back into a 401(k) before doing the backdoor — if your current plan accepts it.
Build Back Better and several subsequent tax bills have proposed ending the backdoor Roth. None have passed. The strategy remains available in 2026 but is not guaranteed indefinitely.
Frequently Asked Questions
What is the 2026 IRA contribution limit?
The 2026 contribution limit for a Traditional or Roth IRA is $7,500, up from $7,000 in 2025. The age 50+ catch-up rose to $1,100 (up from $1,000), so a 50+ saver can contribute up to $8,600. The limit applies to all your IRAs combined — you cannot put $7,500 in a Roth and another $7,500 in a Traditional.
What is the Roth IRA income phase-out for 2026?
For 2026, the Roth IRA contribution phase-out is $153,000–$168,000 of MAGI for single filers and heads of household, and $242,000–$252,000 for married filing jointly. Above those caps you cannot contribute directly to a Roth IRA, though a backdoor Roth conversion remains available. Married filing separately remains $0–$10,000.
What is the Traditional IRA deduction phase-out for 2026?
If you are covered by a workplace retirement plan in 2026, the Traditional IRA deduction phases out from $81,000–$91,000 MAGI for single filers and $129,000–$149,000 for married filing jointly. If your spouse is covered but you are not, the phase-out is $242,000–$252,000. If neither spouse is covered by a workplace plan, the deduction has no income limit.
Roth or Traditional — which should I choose?
The short rule: pick Traditional if you expect to be in a lower tax bracket in retirement than you are now. Pick Roth if you expect to be in the same or higher bracket. Most workers in the 22% bracket or below benefit more from Roth, especially when young; high earners in the 32% bracket and above often benefit more from Traditional. Many savers split contributions to hedge tax-rate uncertainty.
Can I contribute to a Roth IRA if I make too much money?
Not directly, but the backdoor Roth conversion remains legal as of 2026: you contribute up to $7,500 to a nondeductible Traditional IRA and convert it to a Roth. The strategy works cleanly only if you have no pre-tax Traditional IRA, SEP IRA, or SIMPLE IRA balance because of the IRS pro-rata rule. Consult a tax professional before doing this if you have an existing pre-tax IRA balance.
Sources & Further Reading
- IRS Newsroom — 2026 retirement plan limits.
- IRS Notice 2025-67 (PDF) — full announcement with phase-out ranges.
- IRS — IRA Contribution Limits.
- IRS — Roth IRAs overview.
For informational purposes only. Not tax or financial advice. Consult a qualified tax professional for guidance on backdoor Roth conversions and high-earner strategies.