Tax Year 2026Updated July 13, 2026
Traditional vs Roth IRA Calculator 2026: $7,500 Contribution Limit
The IRA contribution limit for 2026 is $7,500 (or $8,600 if you are age 50 or older, thanks to the $1,100 catch-up contribution). Use this calculator to compare the tax benefits of a Traditional IRA (tax-deductible now, taxed in retirement) versus a Roth IRA (no deduction now, tax-free in retirement).
How IRA Contributions Work
Both Traditional and Roth IRAs offer tax advantages for retirement savings, but the timing of those advantages differs:
- Traditional IRA: Contributions are tax-deductible (above-the-line), reducing your taxable income in the contribution year. Withdrawals in retirement are taxed as ordinary income at your then-current rate.
- Roth IRA: Contributions are made with after-tax dollars, no current deduction. Qualified withdrawals after age 59½ are completely tax-free, including all investment gains.
- 2026 contribution limit: $7,500 per person ($8,600 if age 50+). This limit is shared across all Traditional and Roth IRAs.
- Income limits for deductibility (TODO_VERIFY): If you or your spouse are covered by a workplace plan, the Traditional IRA deduction may be reduced or eliminated based on your MAGI. Roth IRA contributions also phase out at higher income levels. These MAGI limits exist but are not modeled in this calculator.
Worked Examples
Example 1: Single Filer, Age 35, $60,000 Income
Filing status: Single
Income: $60,000
Contribution: $6,000
Max contribution (under 50): $7,500
Marginal tax rate: 12%
Traditional IRA tax savings now: $720.00
If retirement rate is also 12%, it's a wash, but tax-free Roth growth has value if your rate rises.
Income: $60,000
Contribution: $6,000
Max contribution (under 50): $7,500
Marginal tax rate: 12%
Traditional IRA tax savings now: $720.00
If retirement rate is also 12%, it's a wash, but tax-free Roth growth has value if your rate rises.
Example 2: MFJ, Age 55, $120,000 Income, Catch-Up
Filing status: Married Filing Jointly
Income: $120,000
Contribution: $8,600 (includes $1,100 catch-up)
Marginal tax rate: 12%
Traditional IRA tax savings now: $1,032.00
Income: $120,000
Contribution: $8,600 (includes $1,100 catch-up)
Marginal tax rate: 12%
Traditional IRA tax savings now: $1,032.00
Example 3: Break-Even Analysis, Current 22% vs Retirement 12%
Filing status: Single
Income: $85,000 (marginal rate: 22%)
Contribution: $7,500
Traditional saves now: $7,500 × 22% = $1,650.00
Traditional costs in retirement: $7,500 × 12% = $900.00
Traditional net benefit: $750.00 per $7,500 contributed
Traditional IRA wins because your current rate (22%) exceeds your expected retirement rate (12%).
Income: $85,000 (marginal rate: 22%)
Contribution: $7,500
Traditional saves now: $7,500 × 22% = $1,650.00
Traditional costs in retirement: $7,500 × 12% = $900.00
Traditional net benefit: $750.00 per $7,500 contributed
Traditional IRA wins because your current rate (22%) exceeds your expected retirement rate (12%).
Frequently Asked Questions
What is the IRA contribution limit for 2026?
The IRA contribution limit for 2026 is $7,500 for those under age 50. If you are age 50 or older, you can contribute an additional $1,100 catch-up contribution, for a total of $8,600.
What is the difference between Traditional and Roth IRAs?
Traditional IRA: Contributions may be tax-deductible now (reducing your current taxable income), but withdrawals in retirement are taxed as ordinary income. Roth IRA: Contributions are made with after-tax dollars (no current deduction), but qualified withdrawals in retirement are completely tax-free. The right choice depends on whether your tax rate is higher now or in retirement.
Can I contribute to both a Traditional and Roth IRA?
Yes, but the combined total across all your Traditional and Roth IRAs cannot exceed $7,500 ($8,600 if age 50+) in 2026. For example, you could put $3,000 in a Traditional IRA and $4,500 in a Roth IRA.
Are there income limits for IRA deductions? (TODO_VERIFY)
Yes | if you or your spouse are covered by a workplace retirement plan, the Traditional IRA deduction phases out based on your Modified Adjusted Gross Income (MAGI). This calculator does not currently model MAGI-based deductibility limits. Roth IRA contributions also have MAGI income limits. Consult IRS Publication 590-A for the current phase-out ranges.
When should I choose a Roth IRA over a Traditional IRA?
Choose Roth when you expect your tax rate in retirement to be higher than your current rate | for example, if you are early in your career with lower earnings now. Choose Traditional when your current rate is higher than your expected retirement rate, so you get the larger tax break now.
What is the deadline for IRA contributions?
You have until the tax filing deadline (typically April 15 of the following year) to make IRA contributions for a given tax year. For 2026 contributions, the deadline is April 15, 2027.
What happens if I contribute more than the limit?
Excess contributions are subject to a 6% penalty tax per year until the excess is corrected. You can correct it by withdrawing the excess (plus any attributable earnings) before the tax filing deadline, or by applying the excess to a future year's contribution.