Roth IRA vs. traditional IRA

Compare the benefits of a traditional IRA vs. a Roth IRA to determine which one to open, fund and invest for retirement.


What's the same

  • Contribution limits – 2019: $6,000 ($7,000 age 50 and older) 2020: $6,000 ($7,000 age 50 and older)
  • Contribution deadline – April 15, 2020. For tax year 2019 the date is Wednesday July 15, 2020
  • Minimum investments – No minimum to open a Fidelity IRA1
  • Fees – No account fees or minimums to open, no minimum investment for Fidelity mutual funds1

Note: A Rollover IRA is a traditional IRA often used for rollovers from an old workplace plan, such as a 401(k).

Comparing Roth and traditional IRAs

Roth IRA Traditional IRA
Tax benefits

Tax-free growth potential and tax-free qualified withdrawals.2

Tax-deferred growth potential and tax-deductible contributions.3

Age requirements

Contribute at any age.

2019: Cannot contribute if over age 70½.
2020: Contribute at any age.4

Income requirements

Your income affects how much you can contribute. See current limits

Everyone 18 or over with earned income can contribute to a traditional IRA. However, there are specific income limits for how much might be tax-deductible.3

Withdrawal taxes

You're able to withdraw your contributions tax- and penalty-free at any time, for any reason, and you won't pay federal taxes on your earnings, as long as the five-year aging requirement has been met and you reach age 59½.2

You will pay taxes when you withdraw your pre-tax contributions and when you withdraw any earnings.5

Early-withdrawal penalties

If you make withdrawals before you're 59½, you might have to pay taxes on your earnings plus a 10% additional tax.2

If you make withdrawals before you're 59½, you might have to pay taxes on your contributions and earnings plus a 10% additional tax.5

Required minimum distributions (RMDs)

RMDs do not apply during your lifetime.

RMDs must be taken starting in the year you turn 72.*

Learn more about Roth IRAs Learn more about traditional IRAs

Need help deciding?