How do I calculate potential IRA returns?

You can use the retirement calculator to see how your retirement accounts, including a Roth and traditional IRA, might grow under different conditions.

Can I contribute to both a Roth and traditional IRA?

Yes, you can contribute to both a Roth and traditional IRA as long as the combined contributions don't exceed the total contribution limit. Be sure to consider your short and long term financial goals before determining how to split contributions between IRAs.

When should I switch from Roth to traditional IRA?

When you should consider contributing more to a Roth IRA over a traditional IRA depends on your current financial situation, desired tax benefits, and retirement readiness. Consider speaking with a financial advisor to learn more.

Traditional IRA vs. Roth IRA

Both IRAs offer tax-advantaged ways to save for retirement. Understanding the difference between them, and how they align with your personal circumstances, can help you make the most of your retirement savings.

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Differences between traditional and Roth IRAs

Traditional IRAs and Roth IRAs are types of individual retirement accounts (IRAs) designed to help you save for retirement. Both IRA options can be funded by contributions or by rolling over your retirement assets from a 401(k) at another financial institution. The difference between them is mostly how and when your money is taxed, but there are additional features, benefits and trade-offs you should be aware of.

Traditional IRA vs. Roth IRA: What you need to know

Traditional IRA vs. Roth IRA: What you need to know
	Traditional IRA	Roth IRA
Overview	This IRA offers you the potential to save on taxes up front and defer them until you take distributions from the account.	This IRA helps you save for retirement with after-tax contributions that offer the potential for tax-free income in retirement.
Taxes	You make contributions on a pretax basis (if your income is below a certain threshold) and pay no taxes until you withdraw money.	Your contributions are not tax-deductible, but any earnings growth is tax-free, and qualified withdrawals are tax and penalty free.
Contribution limits Note: The figures shown to the right are the amounts you can contribute in a given year, in total, across all your traditional and Roth IRAs, including those you hold at other financial institutions.	For the 2026 tax year: If you're 49 or younger: Up to $7,500 If you're 50 or older: Up to $8,600 For the 2025 tax year: If you’re 49 or younger: Up to $7,000 If you’re 50 or older: Up to $8,000	For the 2026 tax year: If you're 49 or younger: Up to $7,500 If you're 50 or older: Up to $8,600 For the 2025 tax year: If you’re 49 or younger: Up to $7,000 If you’re 50 or older: Up to $8,000
Contribution eligibility	You must have taxable compensation or have a spouse with taxable compensation and file a joint tax return to be eligible to contribute.	You must have taxable compensation or have a spouse with taxable compensation and file a joint tax return, AND your income must be below a certain threshold to be eligible to contribute.
Contribution deadline	You can make contributions throughout the year, up to the tax-filing deadline, not including extensions (generally April 15). See the Tax season calendar for exact deadline.	You can make contributions throughout the year, up to the tax-filing deadline, not including extensions (generally April 15). See the Tax season calendar for exact deadline.
Saver’s Credit eligibility	Eligible taxpayers can receive a nonrefundable tax credit of up to $1,000 for single filers ($2,000 for joint filers) for their contributions.	Eligible taxpayers can receive a nonrefundable tax credit of up to $1,000 for single filers ($2,000 for joint filers) for their contributions.
Distributions	Distributions are generally subject to taxes. If you take a distribution before you’re 59½, you might have to pay an additional 10% tax.	Distributions are tax-free if they’re “qualified.” It’s a qualified distribution if: 5 years have passed since the first day of the year of your first contribution AND You’re 59½,or older, you’re taking it to pay for a first-time home purchase (up to a $10,000 lifetime maximum), or you’ve become disabled or pass away. If your withdrawal isn’t a qualified distribution, you’ll have to pay taxes on your earnings and you may have to pay an additional 10% tax.
Required minimum distributions	You’re required to withdraw a minimum amount each year beginning at age 73. These are known as required minimum distributions, or RMDs.	You’re not required to withdraw a minimum amount of money at a certain age.
Inherited IRAs	You’re generally required to take a distribution by a certain deadline. The amount and deadline vary depending on what type of beneficiary you are. As the heir, you’ll generally pay taxes on these distributions based on your current income tax rate.	You’re generally required to take a distribution by a certain deadline. The amount and deadline vary depending on what type of beneficiary you are. As the heir, these distributions will generally be tax-free, since the original owner paid taxes on their contributions.
Investment options	You can invest your assets in a variety of investment options, including stocks, bonds, certificates of deposit (CDs) and mutual funds.	You can invest your assets in a variety of investment options, including stocks, bonds, certificates of deposit (CDs) and mutual funds.

How do I decide between a traditional and Roth IRA?

Both traditional and Roth IRAs offer valuable advantages, but the right choice for you will depend on factors such as your goals and preferences, current savings mix, time horizon, and current and future tax rates.

A traditional IRA tends to be more beneficial when:

You expect your tax rate in retirement to be lower than your current tax rate.
You would prefer the immediate tax savings of a deduction (if eligible) or need it to take advantage of your full employer match or to stay in a lower tax bracket.

A Roth IRA tends to be more beneficial when:

You’re young, in a low tax bracket or expect your tax rate in retirement to be higher than your current tax rate.
You're in a high tax bracket today and expect to remain in a high tax bracket in retirement.
You can forgo the deduction today for the prospect of tax-free retirement income.
You're not eligible to make deductible contributions to a traditional IRA.
You have a longer time horizon to retirement, especially if you're maximizing contributions.
You plan to pass these assets to your heirs instead of spending them in retirement.
You expect higher income from taxable sources, such as traditional IRAs or 401 (k) accounts, in retirement and would benefit from a Roth's tax-free income to help manage your taxes and Medicare premiums in retirement.

Choosing between a traditional IRA and a Roth IRA? We can help.

Start navigating IRAs by finding an Edward Jones financial advisor today. Our financial advisors can help you understand what questions to ask as you decide which IRA might be right for you. They'll work with you to build a solid long-term strategy as you plan for and enjoy your retirement. Contact us for a no-obligation consultation.

Important Information:

Edward Jones, its employees and financial advisors cannot provide tax or legal advice. You should consult your attorney or qualified tax advisor regarding your situation. This content is intended as educational only and should not be interpreted as a specific recommendation or investment advice. Investors should make investment decisions based on their unique investment goals and financial situation.