Dwg: Article written and Venn diagram created.

2026-01-30T19:56:39Z

Article written and Venn diagram created.

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== Traditional IRA vs. Roth IRA ==
A Traditional Individual Retirement Arrangement (IRA) and a Roth IRA are retirement savings plans that offer different tax advantages.<ref name="ref1" /> The main distinction between them lies in the tax treatment of contributions and withdrawals.<ref name="ref2" /> Contributions to a Traditional IRA may be tax-deductible, and the investments grow tax-deferred until retirement, at which point withdrawals are taxed as ordinary income.<ref name="ref3" /> Conversely, Roth IRA contributions are made with after-tax dollars and are not tax-deductible, but qualified withdrawals in retirement are tax-free.<ref name="ref1" /><ref name="ref4" />

Both types of IRAs have the same annual contribution limits, which for 2026 is $7,500, or $8,600 for individuals aged 50 and over.<ref name="ref5" /> However, the ability to contribute to a Roth IRA is subject to income limitations.<ref name="ref5" /> While anyone with earned income can contribute to a Traditional IRA, the tax-deductibility of those contributions may be limited based on income and whether the individual or their spouse is covered by a workplace retirement plan.<ref name="ref2" />

Another key difference is the treatment of required minimum distributions (RMDs). Traditional IRAs require the account holder to begin taking distributions at age 73. Roth IRAs do not have RMDs for the original account owner.

=== Comparison Table ===
{| class="wikitable"
|-
! Category !! Traditional IRA !! Roth IRA
|-
| '''Tax Treatment of Contributions''' || Contributions may be tax-deductible<ref name="ref1" /> || Contributions are made with after-tax dollars and are not tax-deductible<ref name="ref1" /><ref name="ref3" />
|-
| '''Tax Treatment of Withdrawals''' || Withdrawals are taxed as ordinary income in retirement<ref name="ref4" /> || Qualified withdrawals are tax-free in retirement<ref name="ref4" />
|-
| '''Income Limitations for Contributions''' || No income limits to contribute<ref name="ref5" /> || Contributions are limited based on modified adjusted gross income (MAGI)<ref name="ref5" />
|-
| '''Deductibility of Contributions''' || Contributions may be fully or partially deductible, depending on income and workplace retirement plan coverage<ref name="ref2" /> || Contributions are not tax-deductible
|-
| '''Required Minimum Distributions (RMDs)''' || RMDs are required to begin at age 73 || No RMDs for the original account owner
|-
| '''Early Withdrawal of Contributions''' || Withdrawals of contributions before age 59½ are subject to taxes and a 10% penalty, with some exceptions || Contributions can be withdrawn at any time, tax-free and penalty-free
|-
| '''Early Withdrawal of Earnings''' || Withdrawals of earnings before age 59½ are subject to taxes and a 10% penalty, with some exceptions || Withdrawals of earnings before age 59½ may be subject to taxes and a 10% penalty, with some exceptions
|}

[[File:Venn_diagram_Differences_between_IRA_versus_Roth_IRA_comparison.png|thumb|center|800px|alt=Venn diagram for Differences between IRA and Roth IRA|Venn diagram comparing Differences between IRA and Roth IRA]]

== References ==
<references>
<ref name="ref1">[https://www.irs.gov/retirement-plans/individual-retirement-arrangements-iras "irs.gov"]. Retrieved January 30, 2026.</ref>
<ref name="ref2">[https://www.nerdwallet.com/retirement/learn/roth-or-traditional-ira-account "nerdwallet.com"]. Retrieved January 30, 2026.</ref>
<ref name="ref3">[https://www.investopedia.com/ask/answers/081414/can-i-deduct-my-individual-retirement-account-ira-contribution-my-tax-return.asp "investopedia.com"]. Retrieved January 30, 2026.</ref>
<ref name="ref4">[https://www.irs.gov/retirement-plans/traditional-and-roth-iras "irs.gov"]. Retrieved January 30, 2026.</ref>
<ref name="ref5">[https://www.youtube.com/shorts/unvyoKl1Po0 "youtube.com"]. Retrieved January 30, 2026.</ref>
</references>

[[Category:Comparisons]]

Differences between IRA and Roth IRA - Revision history

Dwg: Article written and Venn diagram created.