Roth vs. Traditional IRA Calculator: Which is Right for You?

Individual retirement accounts (IRAs) are popular retirement savings accounts. The two main types of IRAs are categorized as traditional IRA and Roth IRA. The main difference between the two is how the money you contribute is taxed. With a traditional IRA, your contributions are tax-deferred, meaning you don’t pay taxes until you withdraw the money in retirement, and like a 401(k), your contributions are tax-deductible in the year they are made. With a Roth IRA, your contributions are pre-taxed—so you pay taxes on the money now instead of when you withdraw funds in retirement. Use our Roth vs. traditional IRA calculator to see which account will provide the most retirement income for you in the future.

Comparing IRAs: Traditional IRA vs Roth IRA

While the main difference between traditional and Roth IRAs is how contributions are taxed, there are a few additional distinguishing features between the two retirement accounts.

Traditional IRA Roth IRA
Tax break now: Contributions are tax-deductible in the year they are made. You are taxed when you make withdrawals. Tax break later: You pay taxes upfront, and savings grow tax-free.
Must begin taking required minimum distributions at age 70 ½. No required minimum distributions.
Cannot contribute after age 70 ½. Can continue to contribute after age 70 ½.
No income limits to make contributions. In 2020, as a single filer, you can make a full contribution if your modified adjusted gross income (MAGI) is less than $124,000. If you are married and filing jointly, you can make a full contribution if your MAGI is less than $196,000.

Next Steps

Fifth Third can help you build the retirement life you’ve always wanted. Schedule a Retirement University class, find an advisor, or give us a call at 1-866-488-0017.

Additional Resources

Managing Your IRA Account

Your IRA isn’t just a vehicle for tax-deferred retirement savings: it can be an important and significant portion of your wealth plan.

Inheriting an IRA

After inheriting an IRA, you may have questions about IRS rules regarding making withdrawals. Age, IRA type and your relationship to the IRA owner influence distribution rules.

IRA Contribution Calculator

Ira Contribution Calculator: How much can I contribute to an IRA?