Contribute to an IRA
An Individual Retirement Account (IRA) lets your money grow with significant tax advantages. The choice between Roth and Traditional comes down to one question: when do you want to pay taxes?
Roth vs. Traditional IRA
| Feature | Roth IRA | Traditional IRA |
|---|---|---|
| Tax on contributions | After-tax (no deduction) | Pre-tax (may deduct) |
| Growth | Tax-free | Tax-deferred |
| Withdrawals in retirement | Tax-free | Taxed as ordinary income |
| Required Minimum Distributions | None (in your lifetime) | Starting at age 73 |
| Income limits (2026) | Phase out $153k–$168k (single) / $242k–$252k (married) | No limit (deductibility may be limited) |
| Best if you expect | Higher taxes in retirement | Lower taxes in retirement |
Which should you choose?
General guidance: if you're early in your career, a Roth IRA is often the better choice — you're likely in a lower tax bracket now than you will be at retirement, so paying taxes now (Roth) beats paying later (Traditional). If you're in a high tax bracket now, a Traditional IRA or 401(k) may provide more immediate benefit.
Default for most people: Open a Roth IRA. The tax-free growth and withdrawal flexibility are exceptional benefits that compound dramatically over decades.
Where to open an IRA
No account minimums, excellent index funds (ZERO expense ratio funds), great mobile app. Best all-around for most people.
The pioneer of low-cost index funds. Great for long-term investors. Interface is dated but funds are excellent.
Strong research tools, no minimums, excellent customer service. Good alternative to Fidelity.
Once opened, invest in broad market index funds. A simple three-fund portfolio (US total market, international, bonds) or a target date fund is sufficient for most people.
High earner? Consider the Backdoor Roth IRA
If your income exceeds the Roth IRA limits ($168k single / $252k married for 2026), you can still contribute via the backdoor: contribute to a non-deductible Traditional IRA, then convert it to a Roth IRA. This is a legal, widely-used strategy. Consult a tax professional if you have existing pre-tax IRA balances (pro-rata rule applies).
IRA maxed. Now:
Go beyond the match — max out retirement accounts.