Retirement accounts, explained plainly

Traditional vs Roth IRA, explained without jargon

A Traditional IRA generally moves the tax benefit to the year you contribute, while a Roth moves it to the year you withdraw. Compare both accounts side by side or check your eligibility and limits.

Person reviewing retirement account statements and tax forms at a kitchen table

At a glance

Traditional and Roth IRA rules, side by side

The comparison comes down to timing. A Traditional IRA generally moves the tax benefit to the year of contribution through a deduction, while a Roth IRA takes the tax up front and generally makes qualified distributions tax-free. Every figure below carries a 2025 tax-year label. See the full comparison or check income phase-out ranges.

RuleTraditional IRARoth IRA
Tax timing A deduction may lower taxable income in the contribution year; growth stays tax-deferred until withdrawal.1 Contributions use after-tax dollars today; qualified distributions are tax-free.1
Contribution limit $7,000 under age 50, $8,000 at 50 or older. The annual limit is shared across all of your IRAs combined, so opening both accounts does not double it.2 Same shared limit and the same catch-up amount for savers 50 and over.2
Deductibility Depends on filing status, modified adjusted gross income, and whether you or a spouse is covered by a workplace plan.3 No deduction is taken, so deductibility never applies. Income decides whether you may contribute at all.
Income phase-outs No income limit on contributing. Phase-outs apply only to the deduction. Phase-outs apply to the contribution itself for single, head of household, and joint filers.3
Withdrawal taxation Withdrawals are taxed as ordinary income in the year taken. Qualified distributions are tax-free once the account is five years old and you are 59½ or meet another qualifying event.
Penalties A 10% additional tax generally applies before age 59½, with listed exceptions. The same 10% additional tax applies to earnings before 59½; your own contributions come out first.
Five-year rules A separate five-year clock tracks converted amounts. A five-year clock on the account must pass before earnings are distributed tax-free.
RMDs Required distributions begin at age 73 under current law.4 No lifetime required minimum distributions for the account owner.4
  1. IRS Publication 590-A, Contributions to Individual Retirement Arrangements.
  2. IRS 2025 retirement plan limit notice.
  3. IRS Retirement Topics: IRA contribution limits.
  4. IRS FAQs on required minimum distributions.

Decision fork

Choose Traditional if your rate is higher today. Choose Roth if it is higher later.

Timing is the whole comparison. A Traditional IRA generally moves the tax benefit to the year of contribution through a deduction. A Roth IRA gives up the deduction now and asks nothing of qualified distributions later. Both columns share the same annual limit, because the limit applies across all of your IRAs combined.

Choose Traditional if...

  • Your income is unusually high this year and you expect a lower bracket once you stop working. The deduction trims this year's taxable income at your current rate.
  • You want the deduction now and you pass the separate deduction test. Being allowed to contribute and being allowed to deduct are two different questions.1
  • You prefer a smaller tax bill this April over flexibility decades from now.

Example. Single filer, 52, about $118,000 of income, expecting a lower bracket in retirement. A $7,000 contribution plus the $1,000 catch-up lowers this year's taxable income at the current rate.

Choose Roth if...

  • You are early in your career, sitting in a low bracket, and expect higher rates later.
  • You want no required minimum distributions during your lifetime. A Roth owner is not forced to withdraw.2
  • You want later withdrawals to come out free of federal income tax. That applies to qualified distributions taken at age 59½ or older, at least five years after your first Roth contribution.

Example. Same person at 27, earning $46,000, pays tax on $7,000 today at a modest rate and keeps every later qualified withdrawal clear of federal income tax.

Sources: IRS deduction limits and Roth IRA rules, linked above. All figures carry the 2025 label. See the full comparison ledger for limits, phase-out ranges, and deadlines.

Eligibility check

See whether your Traditional contribution is deductible and whether a Roth is open to you

Three inputs are enough. Filing status and modified adjusted gross income decide how far into the phase-out you sit; age decides whether the catch-up amount applies. Figures use 2025 IRS limits. For the whole rule set, read the phase-out ranges, or run the side-by-side comparison tool.

Phase-out progress0%
Traditional IRA deduction
Full deduction: you can deduct the whole contribution.
Roth IRA contribution
You can contribute the full annual limit to a Roth IRA.

Assumes you or your spouse are covered by a workplace retirement plan. Limit and phase-out figures are 2025 amounts; confirm them against the IRS IRA deduction limits.

Contribution rules

Deadlines, limits, and catch-ups, one line each

Figures below are for the 2025 tax year and are usually indexed for inflation. Amounts cite IRS Publication 590-A; the current-year numbers are on our contribution limits table.

  1. Apr 15

    Contribution deadline

    You can fund an IRA for the prior tax year up to the federal filing deadline, generally April 15, not December 31. Filing an extension does not extend this window.

    Deadline
  2. $7,000

    One shared annual limit

    The limit covers every Traditional and Roth IRA you hold, combined. Opening both accounts does not double it. Splitting the amount does not raise it.

    Limit
  3. +$1,000

    Catch-up at age 50

    If you turn 50 by December 31, your own ceiling rises by $1,000, whether the money goes to Traditional or Roth.

    Catch-up
  4. $11,250

    Ages 60 to 63 replace it

    For those specific ages the larger catch-up amount stands in for the standard $1,000, it does not stack on top of it.

    Catch-up
  5. $150k-$165k

    Roth income phase-out, single filers

    Roth eligibility narrows across that modified AGI band for single filers; married filing jointly uses roughly $236,000 to $246,000. Above the top of the band you generally cannot contribute directly.

    Phase-out
  6. Varies

    Traditional deduction phase-out

    If you or a spouse is covered by a workplace plan, deductibility steps down across income ranges that depend on filing status. With no plan on either side, the contribution is generally deductible at any income.

    Phase-out

Roth contributions come out of after-tax income and qualified withdrawals are tax-free at 59½ after a five-year holding period. Still deciding? Run your numbers side by side.

FAQ

Common IRA questions, answered plainly

Short answers with figures labeled for tax year 2025. For the full side-by-side, read the at-a-glance ledger.

What is the core difference between a Traditional and a Roth IRA?

Timing. A Traditional IRA generally moves the tax benefit to the year you contribute: a deductible contribution can lower taxable income now, and withdrawals are taxed later. A Roth IRA flips that. You contribute after-tax dollars and qualified withdrawals come out tax-free, meaning the account has been open at least five years and you are 59½ or older.

Is eligibility one test or several?

Three separate tests. Whether a Traditional contribution is deductible depends on your filing status, income, and whether you or a spouse have a workplace plan. Whether you may contribute to a Roth at all depends on income limits. How much you may contribute depends on the shared annual cap. Run the eligibility calculator to see where you land.

Do the contribution limits double if I open both accounts?

No. The annual limit applies across all of your IRAs combined. Splitting a contribution between a Traditional IRA and a Roth IRA is allowed, but the total stays inside the same cap.

What are the 2025 IRA contribution limits?

For 2025, the limit is $7,000 if you are under 50 and $8,000 if you are 50 or older, which includes the $1,000 catch-up amount. Contributions must come from taxable compensation. Full figures and phase-out ranges live on the contribution limits table.

Can a high earner still contribute to a Roth IRA?

Direct Roth contributions phase out above certain income thresholds that vary by filing status. Above the top of the range, the direct route closes, though a conversion path may remain available. See the phase-out ranges.

Do required minimum distributions apply to both accounts?

A Traditional IRA requires annual distributions beginning at age 73 under current rules. A Roth IRA has no required minimum distributions for the original owner during their lifetime, which is one reason some savers pair the two accounts.

When is the deadline for a prior-year contribution?

Generally the federal tax filing deadline in April of the following year. For tax year 2025 that deadline is April 15, 2026, and the deadline applies to both account types. See the contribution rules timeline.

Still deciding? Start with the full comparison ledger, or send us a question.

Where to go next

Two short reads finish the picture

You have the trade-off. These two pages fill in the mechanics: how each account is actually taxed across the three stages, and whether your filing status and income let you use the one you prefer.

Comparison Traditional vs Roth IRA, ledger by ledger Tax timing, required minimum distributions, and the income tests that apply to each account, with a plain note on who each row tends to favor. Open compare.html Eligibility & limits Check your eligibility and the shared limit Walk through the deductibility and Roth income phase-outs, then see the annual contribution limit and catch-up amount that apply across all your IRAs combined. Open eligibility-and-limits.html