In US retirement planning, the IRA (Individual Retirement Account) is the other main pillar alongside the 401(k). It's a retirement account you open yourself, not through an employer — and the eternal question is "Roth or Traditional?" It comes down to saving on taxes now or withdrawing tax-free later. Here are the 2026 limits, income rules, and how to choose.
What is an IRA?
An IRA is a retirement account you open yourself at a bank or brokerage, choosing your own investments. Use it when you have no employer 401(k), or after maxing one out. The two main types are Traditional and Roth.
2026 limits
| Item | 2026 limit |
|---|---|
| Base contribution (under 50) | $7,500 |
| Catch-up, age 50+ | +$1,100 (total $8,600) |
| Applies to | Traditional + Roth combined |
Note — this limit is combined across Traditional and Roth. Split between them if you like, but the total can't exceed $7,500 ($8,600 at 50+). It's separate from the 401(k) limit, so you can add an IRA even after maxing a 401(k).
Traditional vs Roth: the core comparison
| Item | Traditional IRA | Roth IRA |
|---|---|---|
| Going in | Deductible (conditional) | After-tax (no deduction) |
| While growing | Tax-deferred | Tax-deferred |
| Coming out | Fully taxed | Principal + gains tax-free |
| RMDs | From age 73 | None (no lifetime RMDs) |
| Principal withdrawal | Tax/penalty before 59½ | Contributions withdrawable anytime, tax-free |
Roth's big wins are tax-free retirement income and no RMDs — grow it large, withdraw tax-free, and it's advantageous to leave to heirs.
Roth IRA income limits (2026)
High earners are limited from contributing directly to a Roth. Here are the 2026 MAGI ranges.
| Filing status | Full contribution | Partial (phase-out) | Not allowed |
|---|---|---|---|
| Single / HoH | Under $153,000 | $153,000–$168,000 | Over $168,000 |
| Married filing jointly | Under $242,000 | $242,000–$252,000 | Over $252,000 |
If your income is too high, the Backdoor Roth (contribute to Traditional, then convert) is an option — confirm with a tax pro. Traditional IRA deductibility may be limited by your income and whether you have a workplace plan.
Example: a 30-something earning $90,000
Single, $90,000 a year, in your 30s. ① Your income is under the Roth limit ($153,000), so you can use a Roth IRA. ② Being young with income likely to rise, paying tax now (Roth) and withdrawing tax-free later tends to win. ③ First capture your 401(k) match, then fill the Roth IRA to $7,500. ④ Feel the long-term compounding with our compound calculator.
What order to save (the classic sequence)
- ☐ ① 401(k) up to the employer match (free money)
- ☐ ② Fill the IRA (consider Roth first)
- ☐ ③ Finish maxing the 401(k)
- ☐ ④ Beyond that, a taxable brokerage account
- ☐ Always keep an emergency fund (3–6 months) separate
Key point. Roth vs Traditional is really "pay tax now or later." Low rate now (early-career/low-income) → Roth; high rate now → Traditional deduction. Unsure? Splitting between them is fine.
FAQ
Q. Can I have both a 401(k) and an IRA?
Yes — separate limits. But Traditional IRA deductibility can be limited if you have a workplace plan, based on income. Roth IRA follows the income limits above.
Q. Can I withdraw Roth principal anytime?
Your contributions can be withdrawn anytime, tax- and penalty-free (earnings have conditions). That flexibility is a Roth plus — though it's best left to grow.
Q. What's a Backdoor Roth?
A legal way for high earners to reach a Roth: contribute to a Traditional IRA, then convert. Existing Traditional balances complicate the tax (pro-rata rule), so consult a tax pro.
Q. Does this overlap with Korea's pension?
Different systems, no overlap. Use an IRA on the US side; use Korea's national pension on the Korean side. With both work histories, check the US-Korea totalization agreement.
An IRA boils down to "Roth or Traditional = pay tax now or later." Roth when young and low-rate, Traditional when income and rates are high — and fill it right after the 401(k) match.
This is general information based on 2026 rules, not tax or investment advice. Limits and income thresholds change yearly — verify with the IRS and a CPA. See also our 401(k) guide and Social Security guide.
