AAPL TSLA AMZN META AMD NVDA PEP COST ADBE GOOG AMGN HON INTC INTU NFLX ADP SBUX MRNA AAPL TSLA AMZN META AMD NVDA PEP COST ADBE GOOG AMGN HON INTC INTU NFLX ADP SBUX MRNA AAPL TSLA AMZN META AMD NVDA PEP COST ADBE GOOG AMGN HON INTC INTU NFLX ADP SBUX MRNA Markets Traditional IRA vs. Roth IRA: Which Is the Right Choice for You? March 15, 2026 — 06:07 am EDT Written by Stefon Walters for The Motley Fool -> Key Points Contributions to an IRA are not taken directly from your paycheck as with a 401(k). The maximum amount you can contribute to an IRA in 2026 is $7,500, or $8,600 if you're 50 or older. Deciding which IRA is best for you comes down to when you want to pay taxes. The $23,760 Social Security bonus most retirees completely overlook › Saving for retirement shouldn't be an afterthought; it's a necessity. And one of the best ways to do so efficiently is to take advantage of retirement accounts, which offer tax breaks. While a 401(k) is the most common retirement account, it's not the only one. Individual retirement accounts (IRAs) are another great option and offer benefits that you don't receive with a 401(k). There are two types of IRAs: traditional and Roth . While you can contribute to both, it's generally better to focus on one. But which one is the right choice for you? Well, that depends. Will AI create the world's first trillionaire? Our team just released a report on the one little-known company, called an "Indispensable Monopoly" providing the critical technology Nvidia and Intel both need. Continue » Image source: Getty Images. The difference between a traditional IRA and a Roth IRA The main difference between a traditional IRA and a Roth IRA is the "type" of money you contribute to them. Contributions to a traditional IRA are often tax-deductible, with some exceptions based on income limits and retirement-plan coverage at work. This reduces your taxable income for the year you make the contributions, but you'll owe taxes on the withdrawals you make in retirement (as with a 401(k)). You can't deduct your contributions to a Roth IRA, but your withdrawals are tax-free in retirement. This unique benefit can easily save you thousands in taxes. In 2026, the maximum total amount you can contribute to one or more IRAs is $7,500, or $8,600 if you're 50 or older. Not everyone is eligible to contribute to a Roth IRA An important note about Roth IRAs is the income limit for contribution eligibility . If you're single, you can't contribute to a Roth IRA if your income is above $168,000. If your income is between $153,000 and $168,000, you can contribute something , but not the full $7,500 or $8,600. Earning less than $153,000 means you can contribute the full amount. If you're married and filing jointly, the phaseout range is $242,000 to $252,000. Below that, you can contribute the full amount; above that, you can't contribute any. Which account type is better for you? Deciding between a traditional IRA and a Roth IRA generally comes down to when you want to pay taxes. If you're likely in your highest-earning years, going with a traditional IRA makes sense because you get the upfront tax break (assuming you qualify) and then pay taxes in retirement, when you're likely to be in a lower tax bracket. If you're likely to be in a higher tax bracket in retirement, going with a Roth IRA makes sense because you pay taxes upfront in the lower tax bracket and then have tax-free withdrawals in retirement. The $23,760 Social Security bonus most retirees completely overlook If you're like most Americans, you're a few years (or more) behind on your retirement savings. But a handful of little-known "Social Security secrets" could help ensure a boost in your retirement income. One easy trick could pay you as much as $23,760 more ... each year! Once you learn how to maximize your Social Security benefits, we think you could retire confidently with the peace of mind we're all after. Join Stock Advisor to learn more about these strategies. View the "Social Security secrets" » The Motley Fool has a disclosure policy . The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. Tags Markets The Motley Fool Founded in 1993 in Alexandria, VA., by brothers David and Tom Gardner, The Motley Fool is a multimedia financial-services company dedicated to building the world's greatest investment community. Reaching millions of people each month through its website, books, newspaper column, radio show, television appearances, and subscription newsletter services, The Motley Fool champions shareholder values and advocates tirelessly for the individual investor. The company's name was taken from Shakespeare, whose wise fools both instructed and amused, and could speak the truth to the king -- without getting their heads lopped off. Visit Fool.com for more market news -> More articles by this source -> More Related Articles This data feed is not available