Chapter 03 — Money & Finance

Roth or traditional IRA — which should I pick?

Roth if you expect to be in a higher tax bracket later (typical for younger earners). Traditional if you're in your peak-earning years and want the deduction now. Many people split contributions to hedge.

Follow-up questions

Contribution limit?

$7,000 in 2026 ($8,000 if 50+). Combined across all IRAs.

Can I contribute if I have a 401(k)?

Yes, but the traditional IRA deduction phases out at higher incomes when you're covered by a workplace plan.

What is a backdoor Roth?

Contributing to a traditional IRA then converting to Roth — used when your income exceeds Roth limits. Watch the pro-rata rule.

When can I withdraw?

Roth contributions any time, penalty-free. Earnings after 59½ and a 5-year account age.

Income limits?

Roth IRAs phase out around $150k single / $236k married in 2026. Traditional deductibility depends on workplace plan coverage.

Can I have both?

Yes, but the combined annual limit is $7000 ($8000 if 50+).

People also search

ira contribution limit 2026
backdoor roth explained
traditional ira deduction limit
roth ladder
backdoor roth
ira contribution limits
401k vs ira

Related across The Asked