Traditional vs Roth IRA: Pick the Right One in 2026
The IRS raised the IRA contribution limit to $7,500 for 2026 — a $500 increase that gives every saver more tax-advantaged room. But the bigger question isn't how much to contribute. It's which account type to use. Traditional and Roth IRAs offer opposite tax bargains. Traditional gives you a deduction now and taxes you later. Roth takes your after-tax dollars now and never taxes the growth. With the federal funds rate at 3.64% and the 10-year Treasury yielding 4.25%, the rate environment adds nuance to this decision — because where rates go from here affects what your money earns and what tax brackets look like when you retire. The right answer depends on exactly three variables: your current marginal tax rate, your expected retirement tax rate, and how many years until you withdraw. Everything else is noise.