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Traditional IRA vs Roth IRA


Traditional IRAs are commonly compared to Roth IRAs. While both IRAs are accounts that you have access to outside of the retirement plans that your employer offers. (The plans that employers offer are 401(k) or 403(b) accounts.), they have a few differences.

Income limit for contributions

There are no income limits for whether you may contribute to a Traditional IRA, but there are income limits for contributions to Roth IRAs. See our Roth IRA Contribution Limits 2020 article for details.

Mandatory distribution

Traditional IRAs have mandatory minimum distribution requirements whereas Roth IRAs do not. You are required to withdraw a minimum amount from your traditional IRA each year starting at age 72 (70½ if you turned 70½ before January 1, 2020). Otherwise, you’ll be charged a 50% penalty tax on the minimum distribution amount. If you need to determine your minimum distribution amount, refer to the IRS website or consult with a tax advisor.


Traditional IRA contributions are pre-tax whereas Roth IRA contributions are post-tax. In other words, traditional IRA contributions are tax deductible, but Roth IRA contributions are not. On the flip side, earnings from traditional IRAs are taxable whereas earnings from Roth IRAs are not.