Roth IRA	Traditional IRA
Who is the account best suited for?	Individuals expecting to be in a higher tax bracket at the time of withdrawals Tooltip Your tax bracket is based on your income level. Roth IRAs may be better if you expect your income (and taxes) to be higher in retirement.	Individuals expecting to be in the same or lower tax bracket at the time of withdrawals Tooltip Your tax bracket is based on your income level. Traditional IRAs may be better if you expect your income (and taxes) to be the same or lower in retirement.
What are the primary tax benefits?	Tax-free withdrawals in the future and no required minimum distributions when certain requirements are met	Immediate tax benefits on contributions
How do contributions grow?	Tax-free Tooltip Your money grows without being taxed each year and you won't pay taxes when you withdraw it in retirement.	Tax-deferred Tooltip You won't pay taxes on investment earnings now, but you will when you take money out in retirement.
Are contributions tax-deductible?	No current-year tax benefits Tooltip You won't get a tax break this year, but qualified withdrawals later will be tax-free.	Yes, provides immediate tax benefits Tooltip You may be able to deduct your contribution from your taxable income this year. (subject to income limitations for participants in employer-sponsored plans)
What type of contributions are allowed?	After-tax dollars Tooltip Money you've already paid income tax on. You won't pay taxes on it again when you withdraw it. or a 529 rollover Tooltip A special rule that allows unused funds from a 529 education account to be rolled into a Roth IRA under certain conditions.	Pre-tax Tooltip Money you contribute before paying income tax. You'll pay taxes when you withdraw it. or after-tax dollars
What are max contribution limits for 2025?	$7,000 ($8,000 if over age 50)	$7,000 ($8,000 if over age 50)
What are max contribution limits for 2026?	$7,500 ($8,600 if over age 50)	$7,500 ($8,600 if over age 50)
Who is eligible to contribute?	Those with earned income below a certain level	Anyone with earned income
Are there age restrictions for contributions?	No	No
Are there penalties for withdrawals?	Withdrawals are penalty- and tax-free after 5 years and age 59½ Tooltip To withdraw earnings penalty- and tax-free from a Roth IRA, two conditions must be met: 1) Your first Roth IRA contribution must have been made at least five years ago. 2) You must be at least 59½ years old. 1	Withdrawals are taxed as current income but penalty-free after age 59½2
Are required minimum distributions (RMDs) necessary?	No	Yes, starting at age 73