Terms of Use

IRAs are a great way for you to save for the future.  Your IRA can consist of a range of investments from savings accounts, stocks, ETFs, bonds, and certificates of deposit or share certificates. You can contribute up to a certain limit each year into your IRA and if you're over 50, you are allowed an additional "catch up" contribution.  The tax advantages of a Traditional or Roth IRA depend on your annual income and whether you are covered by your company's retirement plan.

Below we have provided a table to help you understand some of the differences between a Traditional and Roth IRA.

  Traditional IRA Roth IRA
Primary benefits Earnings are tax-deferred until withdrawn. Contributions may be tax deductible (depending on income and workplace plans). Qualified distributions (defined as withdrawals allowed from the plan without penalty) are tax-free. No taxes on earnings if rules are met.
Income limits for contributions There are no income limits for contributing to a Traditional IRA, but your ability to deduct contributions depends on your modified adjusted gross income (MAGI), your filing status, and whether you (or your spouse) have a workplace retirement plan. 

In 2026:

Single or Head of Household (and covered by retirement plan at work):  Fully deductible if MAGI < $81,000; Partially deductible if MAGI $81,000-$91,000; Not deductible if MAGI > $91.000

Married filing jointly (and covered by a retirement plan at work):  Fully deductible if MAGI < $129,000; Partially deductible if MAGI $129,000-$149,000; Not deductible if MAGI > $149,000

Married filing jointly (spouse covered by a retirement plan at work):  Fully deductible if MAGI < $242,000; Partially deductible if MAGI $242,000-$252,000; Not deductible if MAGI > $252,000

Married filing separately (and covered by retirement plan at work): Partially deductible if MAGI < $10,000; Not deductible if MAGI > $10,000.
 		 How much you earn limits how much you can contribute to a Roth IRA.  

In 2026: 

Single - must have a MAGI < $153,000

Joint filers - must have MAGI < $242,000

Your contribution can be reduced or "phased out" if your MAGI approaches these limits:  

Single:  $153,000-$168,000

Married filing jointly:  $242,000-$252,000

Married filing separately:  $0-$10,000

If your MAGI is too high, you cannot contribute directly to a Roth IRA.
Contribution limits

$7,500 combined total across all IRAs
Same
Catch-up contributions Additional $1,100 if 50 years of age or more by end of the tax year Same
Tax advantages

All IRAs are tax deferred.  You do not owe taxes on any earnings until you make a withdrawal.  If you qualify, you may be able to deduct your contributions to a traditional IRA on your federal income tax return, depending on tax-filing and active-participant statuses, as well as income amount.

Earnings grow on a tax-deferred basis.  Earnings are added to taxable income for the year distributed. 

Contributions to a Roth IRA are not tax deductible.  Earnings grow tax deferred. A Qualified Distribution from a Roth IRA is tax-free. 

Earnings are tax-free if you have had an account for five years and one of the following applies:

After age 59½

Death

Disability

First-time home purchase (up to $10,000)
Age for required distributions Mandatory distributions must begin by April 1 following the year you reach age 73.  Beneficiaries are also subject to this rule. No.  Distributions are not required during your lifetime.  Distributions may be taken at any time.
Withdrawal penalties There is a 10% penalty on withdrawals prior to age 59½ except for withdrawals due to:

Death

Disability

Pre-59½ periodic payments

Qualifying medical expenses

Health insurance premiums while unemployed

Withdrawals up to $10,000 toward the purchase of a first home

Conversion to a Roth IRA

Higher-education expenses

The portion of a withdrawal that is the return of nondeductible contributions is not subject to penalty.

 There is a 10% penalty applied to the earnings portions prior to age 59½  except for withdrawals due to:

Death

Disability

Pre-59½ periodic payments

Qualifying medical expenses

Health insurance premiums while unemployed

Withdrawals up to $10,000 toward the purchase of a first home

Higher-education expenses

Withdrawals of after-tax contributions are not subject to penalty.
Conversion options

 

You can convert a Traditional IRA to a Roth IRA (called a Backdoor Roth) regardless of income limits though the converted amount is typically treated as taxable income in the year of the conversion.

 A Roth IRA cannot be converted into any other kind of IRA.