Roth IRA vs. Traditional IRA

Explore the differences between a Roth IRA and a Traditional IRA to see which option may be right for you.

 
When choosing between a Roth IRA and a Traditional IRA, it's important to understand each account's unique set of rules and benefits. You'll want to consider income restrictions as well as potential tax advantages.

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Roth IRA and Traditional IRA Rules and Benefits
  Roth IRA Traditional IRA
Income eligibility

May contribute if modified adjusted gross income (MAGI) does not exceed income limitations. You must have U.S. earned income.

View income limit details

 No income limit restrictions on contributions. You must have U.S. earned income.
Age restrictions None. None.
Tax deductibility Contributions are never deductible.

You may be eligible to deduct all or a portion of your contributions. Deductibility depends on your income, filing status, whether you and/or your spouse are covered by a retirement plan at work, and whether you receive social security benefits.

View income limit details
Withdrawal of contributions
 Withdraw anytime without taxes or penalties. Withdraw anytime, but deductible contributions are taxable and generally subject to penalties if withdrawn before age 59½.
Withdrawal of earnings Tax and penalty-free if a qualified withdrawal. A qualified distribution is tax-free if taken at least 5 years after the year of your first Roth contribution and you've reached age 59½, become totally disabled, died or meet the requirements for first-time home purchase.
 Taxable when withdrawn and generally subject to penalties if withdrawn before age 59½.
Required minimum distributions (RMDs) None during your lifetime.

Your first RMD must be taken by April 1 of the year after the year you turn age 73.*

Keep in mind, if you defer your first RMD until April 1, you’ll also need to take your second RMD in the same year. This additional income could have significant tax implications to consider.

Subsequent RMDs must be taken by December 31 of each year.

Please note different RMD rules apply to inherited IRAs. For questions related to inherited IRAs please speak with your tax or legal professional.
Contribution limits

For the 2023 and 2024 tax years:

  • If you are under age 50, you can contribute a maximum of $6,500 for 2023 and $7,000 for 2024
  • If you are age 50 or older, you can contribute up to $7,500 for 2023 and $8,000 for 2024
Depending on your income, contribution limits may be lower.

For the 2023 and 2024 tax years:

  • If you are under age 50, you can contribute a maximum of $6,500 for 2023 and $7,000 for 2024
  • If you are age 50 or older, you can contribute up to $7,500 for 2023 and $8,000 for 2023
Contribution deadline Your tax return filing deadline (not including extensions). Your tax return filing deadline (not including extensions).

*The SECURE Act of 2019 changed the RMD age requirement from 70½ to 72 and is applicable to those who turned 70½ on or after January 1, 2020. The SECURE 2.0 Act of 2022 now changes the RMD age to 73 in 2023 only for individuals who turn 72 on or after January 1, 2023. Another provision in the new law changes the RMD age to 75 in 2033.

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Income limits for Roth IRA contributions:1

Income Limits for Roth IRA Contributions
Filing Status Eligibility
Single or Head of Household Phased out: $146,000 - $161,0003 for 2024 ($138,000 - $153,000 for 2023)
Married Filing Jointly or Qualifying Widow(er)2 Phased out: $230,000 - $240,0003 for 2024 ($218,000 - $228,000 for 2023)

1There are no income limits for converting Traditional IRA assets to a Roth IRA.

2For married taxpayers filing separately: If you did not live with your spouse at any time during the tax year, see the “single” filing status. Otherwise, your eligibility is phased out between MAGI of $0 and $10,000.

3This amount refers to the taxpayer’s MAGI, which does not include amounts that were converted.

Income limits for Traditional IRA deductibility:4

Income Limits for Traditional IRA Deductibility
  Status Eligibility
Single or Head of Household Not eligible to participate in an employer retirement plan Full Deduction
Eligible to participate in an employer retirement plan Phased out: $77,000 - $87,000 for 2024 ($73,000 - $83,000 for 2023)
Married Filing Jointly5 Neither you nor your spouse is eligible to participate in an employer retirement plan Full Deduction
You are not eligible to participate in an employer retirement plan, but your spouse is eligible Phased out: $230,000 - $240,0003 for 2024 ($218,000 - $228,000 for 2023)
You are eligible to participate in an employer retirement plan Phased out: $123,000 - $143,000 for 2024 ($116,000 - $136,000 for 2023)

4There are no income limits for contributing to a Traditional IRA—the limits only apply to determining whether that contribution is deductible.

5Consult IRS rules or a tax professional if your status is married filing separately or qualifying widow(er).


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