Originally published April 2016. Last updated March 2026.
Should you put your money in a traditional IRA or a Roth IRA? It’s one of the most common retirement planning questions, and the answer depends on a few specific things about your financial situation.
Here’s a straightforward comparison to help you decide.
[toc]
The Core Difference
Traditional IRA: You may get a tax deduction on your contributions now. Your money grows tax-deferred. You pay income tax when you withdraw it in retirement.
Roth IRA: No tax deduction on contributions. Your money grows tax-free. Withdrawals in retirement are tax-free (assuming you meet the requirements).
In short: traditional gives you a tax break today, Roth gives you a tax break in retirement.
2025 Contribution Limits (Same for Both)
- Under age 50: $7,000
- Age 50 and older: $8,000
This is a combined limit. If you contribute $4,000 to a traditional IRA, you can put at most $3,000 in a Roth IRA that same year (or $4,000 if you’re 50+).
Income Limits
Roth IRA income limits (2025):
- Single: full contribution if MAGI is under $150,000; phases out between $150,000-$165,000
- Married filing jointly: full contribution under $236,000; phases out between $236,000-$246,000
Traditional IRA: Anyone with earned income can contribute, regardless of income. But the tax deduction phases out if you (or your spouse) have a workplace retirement plan:
- Single with workplace plan: deduction phases out between $79,000-$89,000
- Married filing jointly with workplace plan: $126,000-$146,000
When a Traditional IRA Makes More Sense
- You’re in your peak earning years and expect a lower tax bracket in retirement
- You want to reduce your taxable income this year
- Your income is too high for a Roth contribution and you don’t want to deal with a backdoor conversion
- You don’t have a workplace retirement plan (making the full contribution deductible at any income level)
When a Roth IRA Makes More Sense
- You’re early in your career with a relatively low income (pay taxes at a low rate now, withdraw tax-free later)
- You believe tax rates will be higher in the future
- You want flexibility in retirement to manage your tax bracket
- You don’t want to deal with required minimum distributions (Roth IRAs have none during your lifetime)
- You want to pass tax-free assets to your heirs
The Best Answer? Both.
If you can, contribute to both types. Having pre-tax and after-tax buckets in retirement lets you control your taxable income year by year. Draw from the traditional in low-income years (paying tax at a low rate), draw from the Roth in high-income years (paying no additional tax).
If your income is too high for a direct Roth contribution, a backdoor Roth IRA strategy lets you contribute indirectly at any income level.
FAQ
Can I contribute to both a traditional and Roth IRA?
Yes, but your total contributions across both accounts can’t exceed $7,000 ($8,000 if 50+) for 2025.
Can I switch from a traditional IRA to a Roth?
Yes. That’s a Roth conversion. You’ll pay income tax on the amount converted, but future growth is tax-free. There’s no income limit on conversions.
What about a Roth 401(k)?
Many employers now offer a Roth 401(k) option alongside the traditional 401(k). The contribution limit is $23,500 ($31,000 if 50+) for 2025, separate from your IRA limit. Starting in 2024, Roth 401(k)s no longer have required minimum distributions.
Schedule a free 20-minute consultation to figure out the right mix for your situation.
R.L. Brown Wealth Management
106 W Vine St, Suite 300, Lexington, KY 40507
859.317.5889
