How does the Roth vs Traditional decision work?
A Traditional IRA gives you a tax deduction now and taxes every dollar you withdraw later. A Roth IRA gives you nothing now, but qualified withdrawals — including all the growth — are tax-free. If your tax rate is identical at both ends and you invest the Traditional tax savings, the two come out exactly even. Everything else is about how your rate changes.
That’s why the calculator works out your current marginal rate (federal plus state on your next dollar) from your income and state, then compares it with the rate you expect in retirement.
What are the 2026 IRA income limits?
| Rule (2026) | Single / HoH | Married filing jointly |
|---|---|---|
| Roth IRA contribution phase-out | $153,000 – $168,000 | $242,000 – $252,000 |
| Traditional deduction phase-out (you have a workplace plan) | $81,000 – $91,000 | $129,000 – $149,000 |
| Traditional deduction phase-out (only your spouse has a plan) | — | $242,000 – $252,000 |
When does Traditional usually win?
- You’re in a high bracket now (24% or more federal) and expect a lower one in retirement.
- You live in a high-tax state now and plan to retire in a no-income-tax state.
- You need the deduction to qualify for other benefits, such as a lower ACA premium or RAP student loan payment, both based on AGI.
When does Roth usually win?
- You’re early in your career in the 10% or 12% bracket.
- You expect large pensions, Social Security or required distributions to keep your retirement income high.
- You want flexibility: Roth contributions (not earnings) can be withdrawn any time, and Roth IRAs have no lifetime required distributions.
Frequently asked questions
What is the IRA contribution limit for 2026?
$7,500, plus a $1,100 catch-up if you’re 50 or older — $8,600 in total. The limit is shared across all your Roth and Traditional IRAs.
What are the 2026 Roth IRA income limits?
The ability to contribute phases out between $153,000 – $168,000 of modified AGI for single and head-of-household filers and $242,000 – $252,000 for married couples filing jointly. Above the range you can’t contribute directly.
Is Roth or Traditional better?
It mostly comes down to tax rates. If your tax rate in retirement will be lower than today, Traditional usually wins; if it will be the same or higher, Roth wins. Roth also has no required minimum distributions during your lifetime and gives you tax-free money to manage future tax brackets.
Can I deduct a Traditional IRA if I have a 401(k)?
Only partly, at higher incomes. If you’re covered by a workplace plan, the deduction phases out between $81,000 – $91,000 (single) and $129,000 – $149,000 (married filing jointly) in 2026.
What is a backdoor Roth IRA?
If your income is above the Roth limits, you can contribute to a nondeductible Traditional IRA and convert it to a Roth. It works cleanly only if you have no other pre-tax IRA balances, because of the pro-rata rule. Check with a tax professional before doing it.
Sources
Estimates for planning, not financial, tax or legal advice. CalciTools calculators use published government figures and the assumptions shown on each page. Your actual numbers depend on details we don’t model. Check important decisions with a qualified professional.