Pay tax now or later
Traditional accounts give you a tax deduction today, and you pay income tax when you withdraw in retirement. Roth accounts use money you have already paid tax on, and qualified withdrawals in retirement are tax-free. If your tax rate is the same in both periods and you invest the same pre-tax budget, the two end up exactly equal. The decision comes down to whether you expect your tax rate to be higher now or later.
Someone in the 24% bracket now who expects 15% in retirement comes out ahead with traditional. A young worker in the 12% bracket who expects higher income later often does better with Roth.
Reasons to mix both
Nobody knows future tax rates, so many people split contributions between the two to hedge. Roth money also gives flexibility: Roth IRAs have no required minimum distributions for the original owner, and your contributions (not earnings) can be withdrawn at any time. Traditional money helps most during high-earning years, and it lets you fill low tax brackets with withdrawals or Roth conversions in early retirement.
Common questions
Is Roth or traditional better?
Traditional if your tax rate now is higher than in retirement; Roth if it is lower. Equal rates give equal results.
What are the IRA limits for 2026?
$7,500 for people under 50, with an extra catch-up contribution from age 50.
Can I have both a Roth and a traditional account?
Yes. Many people split contributions to diversify their tax exposure.
This calculator gives estimates for planning. Real returns, rates and prices change, so treat the result as a guide rather than a promise. Read how we build and check our calculators.