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 – Monday, April 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-free growth and tax-free qualified withdrawals.2
Tax-deferred growth and tax-deductible contributions.3
Contribute at any age.
Contribute until you're 70½.4
Your income affects how much you can contribute. See current limits
Your income does not affect how much you can contribute.
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
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 70½.
|Learn more about Roth IRAs||Learn more about Traditional IRAs|
Need help deciding?
IRA Contribution Calculator
Answer a few questions about yourself to help find out which type of IRA may be right for you.
Contributing to your IRA
Already have a Fidelity IRA? Learn about the benefits of making regular contributions.
Choosing investments for your IRA
Learn about the investments options for your IRA—from Fidelity and non-Fidelity funds to stocks, bonds, ETFs, and CDs.
Self-employed or a small business owner?
Compare our small business retirement plans, including SEP and SIMPLE IRAs, 401(k)s, and investment-only plans.