Roth IRA vs. Traditional IRA: What’s Best For You?

Learn what individual retirement account will give you the biggest return before retirement no matter what stage you’re at in life.

Deciding retirement accounts and goals is never easy, but something we all need to do. It’s better to start sooner rather than later – most Americans are behind on saving for retirement. It’s a good idea to contribute to a work 401(k) or 403(b) if your company offers it for employees, but you should also start a personal individual retirement account (IRA).

Is a Roth IRA or Traditional IRA better for you? Read further to see benefits of each one.

Roth IRA

Contributions made to a Roth IRA are taxed before they are put into your account, meaning when you are ready to retire, taxes will already be paid. This is typically a good option for people starting their IRA at younger age, especially if you think taxes will be higher when it’s time for you to retire.

While Traditional IRAs don’t have income limitations, Roth IRAs do; for 2026, the Modified Adjusted Gross Income (MAGI) range is $153,000-$168,000 for singles and $242,000-$252,000 for married couples filing jointly. In these income ranges and above, contribution limits are modified. These amounts change yearly, so it’s recommended you visit the IRS website for the most accurate information.

Traditional IRA

With a Traditional IRA, taxes are paid as you make withdrawals in retirement. By deferring your taxes, you might pay more when you go to take it out, but you may earn more in dividends, interest payments, and capital gains because they will be compounded per year without taxes.

On the other hand, if you have a large income now, a Traditional IRA might be a better option because you can drop to a lower tax bracket after retirement.

Benefits of Both

In both IRA accounts, your gains will not be taxed as long as the money is in the IRA. In 2026, the total you can contribute to any of your IRAs cannot be more than $7,500 (or $8,600 if you’re age 50 or older).

Questions about IRAS? Click here to learn more about IRAs at A+FCU and stop by a branch with any questions.