See exactly which IRA gives you more after-tax money in retirement. Enter your details — get instant side-by-side comparison.
⚡ Quick Answer: Choose Roth IRA if you expect higher taxes in retirement (pay taxes now at lower rate). Choose Traditional IRA if you expect lower taxes in retirement (defer taxes to later). 2026 limit: $7,000/yr ($8,000 if 50+). If unsure, most financial advisors recommend Roth for younger investors under 40.
| Feature | Roth IRA | Traditional IRA |
|---|---|---|
| Tax treatment | After-tax contributions | Pre-tax (deductible) |
| Withdrawals | Tax-FREE in retirement | Taxed as ordinary income |
| RMDs | None ✓ | Age 73 |
| Income limits (2026) | Single: $165K | MFJ: $246K | None for contributions |
| Early withdrawal | Contributions anytime tax-free | 10% penalty + taxes (<59½) |
| Best for | Young, lower income now, expect higher taxes later | High earners, expect lower taxes in retirement |
Both IRAs grow at the same investment rate. The difference is purely in taxes. Roth: you contribute after-tax dollars, so $7,000 contribution means you already paid income tax on that money. At retirement, all withdrawals are completely tax-free. Traditional: your $7,000 contribution reduces your taxable income now (tax deduction), but every dollar you withdraw in retirement is taxed as ordinary income.
The math is simple: if your tax rate is the same now and in retirement, both IRAs give identical after-tax wealth. Roth wins if your future tax rate is higher. Traditional wins if your future tax rate is lower.
Last updated: May 2026. IRA contribution limits and income thresholds may change annually with IRS adjustments. Consult a financial advisor for personalized retirement planning advice. Try our Retirement Calculator →