Roth vs. Traditional decision rule
Simple heuristic: if your marginal tax rate today is HIGHER than in retirement, Traditional wins. If LOWER, Roth wins. If SAME, they're mathematically identical (before considering RMDs and estate planning).
- • Young, low income: Roth (tax rate only goes up from here)
- • Peak earning years, high bracket: Traditional (defer to lower future rate)
- • Uncertain: split — some in each
- • High net worth for heirs: Roth (no RMD, tax-free to beneficiaries)
Backdoor Roth for high earners
Over the Roth income limit ($150K single/$236K married)? Contribute to a Traditional IRA (non-deductible) then immediately convert to Roth. Legal loophole confirmed by IRS. Watch the pro-rata rule if you have existing pre-tax IRA balances.
IRA + 401(k) contribution stacking
IRA limits are SEPARATE from 401(k). In 2026 you can contribute $7,000 to an IRA AND $23,500 to a 401(k) — combined $30,500 tax-advantaged, plus catch-ups if 50+.
Related guides
Long-form playbooks on the same topic, written by the RevenueLab editorial team.
FAQ
How much can I contribute to an IRA in 2026?
$7,000 if you're under 50, $8,000 if 50+. Combined limit across Traditional AND Roth IRAs — not $7,000 per account.
Roth vs Traditional IRA — which is better?
Depends on your current vs future tax rate. Higher rate today → Traditional (defer). Higher rate expected in retirement → Roth (pay now). If uncertain, split contributions.
Can I contribute to both a Roth IRA and a 401(k)?
Yes. The $7,000 IRA limit is completely separate from the $23,500 (2026) 401(k) limit. Max both if you can.
What is the Roth IRA income limit?
2026: phase-out begins at $150K MAGI single, $236K married-filing-jointly. Above the top of the phase-out ($165K / $246K) you can't contribute directly — use the Backdoor Roth instead.
When can I withdraw from an IRA without penalty?
Age 59½ for both types. Roth contributions (not earnings) can always be withdrawn tax-free. Early withdrawal exceptions: first home ($10K), qualified education, disability, medical bills.
What is a Backdoor Roth IRA?
Contribute to a Traditional IRA (non-deductible), then convert to Roth. Legal way for high earners above the Roth income limit to still get money into a Roth. Careful of the pro-rata rule if you hold other pre-tax IRA money.
Are Required Minimum Distributions (RMDs) required?
Traditional IRA: yes, starting at age 73. Roth IRA: no RMDs during the original owner's lifetime. Inherited Roth IRAs may have RMDs under SECURE Act 2.0 rules.
Should I convert my Traditional IRA to Roth?
Only if you can pay the tax bill from OUTSIDE the IRA and expect to be in a HIGHER tax bracket later. Convert in low-income years (early retirement, sabbatical). Convert in slices to avoid pushing yourself into a higher bracket.
How this calculator is built
Independently maintained
Written by Sam Doshi and the RevenueLab editorial team. We don't sell the data feeds this tool is built on.
Sourced from primary data
Benchmarks come from public AdSense / Stripe / IRS disclosures and reader-submitted data — never third-party "$X per view" claims. Full methodology.
Last reviewed
July 2026. We re-check every figure on the platform on a rolling quarterly cycle.
Editorial standards
See our editorial policy and disclaimer. Results are estimates, not advice.