Compare which retirement account is better for your situation
Key differences between Traditional and Roth IRAs
| Feature | Traditional IRA | Roth IRA |
|---|---|---|
| Tax on contributions | Pre-tax (deductible) | After-tax (no deduction) |
| Tax on withdrawals | Taxed as income | Tax-free ✓ |
| 2025 contribution limit | $7,000 / $8,000 (50+) | $7,000 / $8,000 (50+) |
| Required Minimum Distributions | Age 73 | None ✓ |
| Income limits | Deductibility phases out at high income | Contributions phase out ~$161K (single) |
| Early withdrawal (before 59½) | 10% penalty + taxes | Contributions can be withdrawn anytime |
| Best if… | Tax rate is higher now than in retirement | Tax rate is lower now (young/FIRE) |
| FIRE friendliness | Good — enables Roth conversion ladder | Excellent — tax-free growth for decades |