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 – Wednesday, July 15, 2020 (for the 2019 tax year)
  • 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 and tax-free qualified withdrawals.2

Tax-deferred growth 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

Your income does not affect how much you can contribute.

Withdrawal taxes

You won't pay taxes when you withdraw your contributions, and you won't pay federal taxes on your earnings, as long as the five-year aging requirement has been met.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 a 10% penalty.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?