IRA Contribution Limits 2026: Traditional vs Roth Rules

Picture this: You've finally decided to get serious about retirement savings. You've heard IRAs are a smart move, but when you start researching, you're hit with terms like "income phase-outs," "modified adjusted gross income," and conflicting advice about Traditional versus Roth accounts. Sound familiar?

Here's the truth: Understanding IRA contribution limits for 2026 isn't just about knowing the dollar amount you can save. It's about understanding which type of IRA you qualify for, how much of your contribution might be tax-deductible, and which account will actually serve your retirement goals best.

The good news? Once you understand the rules (and yes, there are quite a few), you can make a confident choice that could save you thousands in taxes over your lifetime. Let's break it down in plain English.

Let's start with the simplest part. For 2026, the IRS allows you to contribute:

• $7,000 if you're under 50 years old
• $8,000 if you're 50 or older (that extra $1,000 is called a "catch-up contribution")

These limits apply whether you choose a Traditional IRA, a Roth IRA, or split contributions between both. That's right: the $7,000 (or $8,000) is your total across all IRA accounts, not per account.

But here's where it gets interesting. Just because you can contribute up to these limits doesn't mean you'll get the full tax benefits, or that you even qualify to contribute at all. That depends on your income and which type of IRA you choose.

With a Traditional IRA, you can always contribute (assuming you have earned income), but whether you can deduct that contribution from your taxes depends on two factors: your income and whether you (or your spouse) have access to a retirement plan at work like a 401(k).

If you're NOT covered by a workplace retirement plan: Congratulations! You can deduct your full Traditional IRA contribution regardless of your income. This is the simplest scenario.

If you ARE covered by a workplace plan: Your ability to deduct contributions phases out based on your modified adjusted gross income (MAGI). For 2026, here are the income phase-out ranges:

• Single filers: Phase-out begins at $79,000 and ends at $89,000
• Married filing jointly: Phase-out begins at $126,000 and ends at $146,000
• Married filing separately: Phase-out begins at $0 and ends at $10,000 (yes, this filing status gets penalized)

What does "phase-out" mean in practice? Let's say you're single and earn $84,000. You're right in the middle of the phase-out range, so you can deduct about half of your $7,000 contribution. Earn $90,000 or more? You get zero deduction.

Special rule for spouses: If you're not covered by a workplace plan but your spouse is, different income limits apply. For 2026, your deduction phases out between $236,000 and $246,000 of combined MAGI.

Roth IRAs work differently. Instead of limiting your tax deduction, your income determines whether you can contribute at all. Remember, Roth contributions are made with after-tax dollars, but your money grows tax-free and you pay zero taxes on qualified withdrawals in retirement.

For 2026, here are the Roth IRA income limits:

• Single filers: Phase-out begins at $150,000 and ends at $165,000
• Married filing jointly: Phase-out begins at $236,000 and ends at $246,000
• Married filing separately: Phase-out begins at $0 and ends at $10,000

If you earn less than the phase-out start point, you can contribute the full amount. If you're in the phase-out range, you can make a partial contribution. If you earn more than the upper limit, you cannot contribute directly to a Roth IRA at all (though there's a legal workaround called the "backdoor Roth" that we'll touch on later).

Let's look at an example: You're married filing jointly with a combined MAGI of $241,000. You're right in the middle of the phase-out range, so you can each contribute approximately $3,500 to a Roth IRA instead of the full $7,000.

Now that you understand the rules, how do you actually decide which IRA is right for you? Here's a practical framework:

Choose a Traditional IRA if:

• You want an immediate tax deduction this year
• You expect to be in a lower tax bracket in retirement
• Your income is too high for Roth contributions but low enough to deduct Traditional contributions
• You're in your peak earning years and need to reduce current taxable income

Choose a Roth IRA if:

• You're early in your career with a relatively lower income (and tax bracket) now
• You expect to be in the same or higher tax bracket in retirement
• You want tax-free income in retirement (especially valuable if tax rates rise)
• You appreciate the flexibility (you can withdraw contributions anytime without penalty)
• You want to avoid Required Minimum Distributions (RMDs) at age 73

Consider doing both if: You have a moderate income that allows partial deductibility on a Traditional IRA and you can also contribute to a Roth. Splitting your $7,000 between both accounts gives you tax diversification in retirement.

Misconception #1: "I make too much money to have an IRA."
False! Anyone with earned income can contribute to a Traditional IRA. You might not get a tax deduction, but the money still grows tax-deferred. Plus, high earners can use the backdoor Roth strategy: contribute to a non-deductible Traditional IRA, then immediately convert it to a Roth.

Misconception #2: "The $7,000 limit is per account."
Nope. It's your total across all Traditional and Roth IRAs combined. If you put $4,000 in a Traditional IRA, you can only put $3,000 in a Roth IRA that same year.

Misconception #3: "I have a 401(k), so I can't contribute to an IRA."
You absolutely can contribute to both! Having a 401(k) just affects whether your Traditional IRA contribution is tax-deductible. It doesn't affect Roth IRA eligibility at all (only income does).

Misconception #4: "If I'm in the phase-out range, it's not worth contributing."
Even a partial contribution is valuable. Tax-deferred or tax-free growth over decades is powerful, even if you don't get the full upfront deduction.

If you're married and one spouse doesn't work (or earns very little), you can still fund an IRA for that spouse using the working spouse's income. This is called a spousal IRA, and it's a fantastic way to double your household's retirement savings.

The rules are the same: up to $7,000 ($8,000 if 50+) for the non-working spouse, subject to the same income limits for Roth contributions or Traditional deductibility. The key requirement is that your combined earned income must be at least equal to your total IRA contributions.

Self-employed individuals should know that in addition to IRAs, you might qualify for a SEP-IRA or Solo 401(k) with much higher contribution limits. These can be used alongside regular IRAs for even more retirement savings.

Military members with combat pay can choose to include or exclude that income when determining IRA eligibility, giving some flexibility in managing Roth income limits.

Ready to make your move? Here's what to do next:

Step 1: Calculate your modified adjusted gross income (MAGI) for 2026. This is generally your adjusted gross income with certain deductions added back. Your tax software or accountant can help.

Step 2: Determine which IRA type you qualify for based on the income limits above. Remember, you can contribute to a Traditional IRA regardless of income (deductibility is what's limited).

Step 3: Consider your current vs. future tax situation. If you're genuinely unsure, splitting contributions between Traditional and Roth gives you tax diversification.

Step 4: Set up automatic monthly contributions if possible. Contributing $583/month ($7,000 ÷ 12) is often easier than finding $7,000 all at once, plus you benefit from dollar-cost averaging.

Step 5: Mark your calendar: You have until April 15, 2027 to make your 2026 IRA contributions. That's right, you get extra time beyond the calendar year!

Important note: This article provides educational information about IRA rules and limits. We are not certified financial planners or advisors. Before making any investment decisions or determining which retirement account is best for your situation, please consult with a qualified financial advisor who can review your complete financial picture.