A quick reference on how these two account types differ, for anyone who wants the fundamentals before reading our deeper strategy pieces.
Published by IvyCrest Private Wealth & Partners
If you’ve read our pieces on the backdoor Roth strategy, the mega backdoor Roth, or 529-to-Roth rollovers, you’ve seen us assume some familiarity with how Traditional and Roth IRAs differ. This page fills in that foundation.
What Is a Traditional IRA?
A Traditional IRA is an individual retirement account funded with pre-tax or tax-deductible dollars, depending on your income and whether you’re covered by a workplace retirement plan. Money grows tax-deferred, and withdrawals in retirement are taxed as ordinary income. There’s no income limit on who can contribute — only on whether the contribution can be deducted.
What Is a Roth IRA?
A Roth IRA is funded with after-tax dollars — you get no upfront deduction, but qualified withdrawals in retirement, including all investment growth, come out completely tax-free. Unlike a Traditional IRA, direct contributions are restricted once your income rises above certain thresholds (more below).
Key Differences at a Glance
| Traditional IRA | Roth IRA | |
|---|---|---|
| Contributions | Pre-tax or after-tax, depending on deductibility | Always after-tax |
| Withdrawals in retirement | Taxed as ordinary income | Tax-free if qualified |
| Income limit to contribute | None | Yes — phases out at higher incomes |
| Required minimum distributions | Required starting at age 73 | None during the original owner’s lifetime |
2026 Contribution & Income Limits
- Combined limit: The Traditional and Roth IRA contribution limits share one combined ceiling — $7,500 for 2026, or $8,600 if you’re 50 or older — across all your IRAs together.
- Traditional IRA deduction phase-out (if covered by a workplace plan): $81,000–$91,000 for single filers; $129,000–$149,000 for joint filers where the contributing spouse is covered; $242,000–$252,000 for joint filers where only the other spouse is covered. If neither spouse is covered by a workplace plan, the deduction isn’t limited by income at all.
- Roth IRA contribution phase-out: $153,000–$168,000 for single filers; $242,000–$252,000 for joint filers. Above the top of these ranges, direct Roth contributions aren’t permitted — which is the starting point for strategies like the backdoor Roth.
Related Reading
- Curious what to do once you’re past the direct Roth income limits? See Backdoor Roth IRA Contributions: What High-Income Central New Jersey Professionals Need to Know in 2026
- Want to move more than the IRA limit into Roth space through a 401(k)? See The Mega Backdoor Roth: How Central New Jersey Executives and Business Owners Can Move Far More Into Tax-Free Growth in 2026
- Sitting on unused 529 college savings? See 529-to-Roth IRA Rollovers: What Central New Jersey Families Need to Know in 2026
Sources
- Internal Revenue Service, “Traditional and Roth IRAs.” irs.gov
- Internal Revenue Service, “401(k) Limit Increases to $24,500 for 2026, IRA Limit Increases to $7,500.” irs.gov
This page is for general informational purposes only and does not constitute tax, legal, or individualized investment advice. Consult your tax advisor regarding your specific situation.
Securities and investment advisory services offered through &Partners, LLC, a broker-dealer and investment adviser registered with the U.S. Securities and Exchange Commission and member FINRA, SIPC.
