IRA DECISION HUB · 2026
IRAs: Decide when the tax bill should arrive.
An IRA is not one decision. It is three: how money goes in, what happens when it moves, and how it comes back out. Get those moments in the right order and the rules become much easier to use.
The planner's shortcut: do not ask “Roth or traditional?” in isolation. Ask when the deduction is valuable, when the withdrawal will be taxed, and what other rules the move touches.
ONE ACCOUNT · THREE TAX MOMENTS
The IRA lifecycle
01INContribution, deduction, Roth eligibility
02MOVEConversion, rollover, recharacterization
03OUTWithdrawals, RMDs, inherited IRA rules
THE QUESTIONTax now or later?
The account label matters less than the tax treatment at each transition.
Which IRA decision is actually in front of you?
You do not need every IRA rule at once. Start with the transition happening now, then follow the related tax and timing rules.
2026 IRA REFERENCE · CHECKED OCT. 1, 2026
Verify at IRS.gov ↗
The limits and dates worth keeping close.
- $7,500
- 2026 IRA contribution limit
- $8,600
- Age 50+ with catch-up
- $153k–$168k
- Single / head-of-household Roth IRA phaseout
- $242k–$252k
- Married filing jointly Roth IRA phaseout
- 73 / 75
- RMD age depends on birth year. Original Roth IRA owners have no lifetime RMDs.
- Apr. 15, 2027
- 2026 IRA contribution deadline for most people
Roth IRA limits use modified adjusted gross income and filing status. Traditional IRA deduction limits are different. RMD age depends on birth year.
Eligibility first. Tax choice second. Investment third.
The account-opening step is easy. The decisions around it are where the value is.
- 01Can I contribute?
Check earned income and Roth IRA income limits before funding the account.
Roth IRA Income Limits for 2026 → - 02Roth or traditional?
The useful question is usually not which account is “better.” It is when you want the tax break.
See the tax-timing example → - 03Open, fund, then invest it.
A common miss is making the deposit and leaving the money sitting in the IRA's settlement cash instead of choosing the intended investment.
How to Start a Roth IRA →Roth IRA Contribution Rules →IRA contribution deadline →
Same $1,000. Same growth. Move only the future tax rate.
That isolates the question Roth versus traditional is really trying to answer.
AT A 22% TAX RATE NOW AND LATERSame after-tax result under these assumptions.
What if your tax rate later is different?
Keep the same $1,000 of earned income and identical investment growth. Move only the future tax rate.
Assumptions: traditional contribution is fully deductible now; Roth contribution is funded after 22% tax; both investments double.
Traditional IRA keeps$1,560
Roth IRA keeps$1,560
At 22%, both keep $1,560 under these assumptions.
Teaching illustration, not a tax projection. Deduction eligibility, state taxes, credits, RMDs, Medicare/IRMAA, investment returns, and fees can change the real decision.
The point: paying tax in the lower-rate period generally helps. The hard part is estimating which years are actually lower once deductions, RMDs, Social Security, Medicare/IRMAA, state taxes and other income are connected.
A conversion and a recharacterization are different moves.
Both can involve traditional and Roth IRAs. They solve different problems and follow different rules.
Traditional IRA→Roth IRA
Move pretax retirement money to Roth and generally recognize taxable income for the conversion year.
Roth Conversion Rules →Contribution↔Other IRA type
Correct certain IRA contributions by treating the contribution as if it had been made to the other type. This does not undo a Roth conversion.
IRA Recharacterization Rules →Before you convert: a Roth conversion made now cannot be recharacterized back to a traditional IRA. Model the tax cost before moving the money.
CONVERSION SURPRISE
The pro-rata rule sees more than the IRA you just opened.
If you have after-tax basis plus pre-tax money in traditional, SEP or SIMPLE IRAs, Form 8606 generally uses the combined year-end value of those traditional IRAs when determining the taxable share. You usually cannot isolate one new after-tax contribution and call that conversion fully tax-free.
See the pro-rata rule →Age changes the IRA question.
Use the age band first, then match the rule to the IRA type and the reason money is leaving.
Early withdrawals
Before 59½, Roth regular contributions can still come out tax- and penalty-free. Earnings usually cannot unless an exception and the Roth rules line up.
Roth IRA withdrawal rules →72(t) / SEPP rules →The penalty hurdle changes
The usual 10% early-distribution tax is no longer the central issue. For Roth IRA earnings to be qualified, the five-year rule still matters.
Roth 5-year rules →Required distributions
Traditional IRA RMD age is 73 for people born 1951–1959 and 75 for those born 1960 or later. Original Roth IRA owners do not take lifetime RMDs.
Can you combine RMDs? →What if you missed an RMD? →BRANCH · INHERITED IRA
Inherited an IRA? Identify the beneficiary rule before moving the money.
Spouse and non-spouse beneficiaries can face different choices, and the 10-year rule does not give every beneficiary the same annual-distribution answer.
READInherited IRA RMD Rules for 2026Start with beneficiary type, timing, and whether annual distributions may apply.
USERMD CalculatorRun the numbers after you know which beneficiary rule applies.
VERIFYIRS Beneficiary GuidancePrimary-source guidance on beneficiary categories and distribution rules.
The IRA library, organized by the decision.
STILL HAVE AN EDGE CASE?
Ask Michael →
Ask the IRA question the way you would actually say it.
Describe what happened, which account is involved, and what you are trying to do next.
A USEFUL NEXT STEP
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Like seeing the tax consequence before you make the move?
Financial Clarity uses the same planner-style approach for retirement, taxes, Social Security, Medicare, investing, and the money decisions that connect them.
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The durable decisions come first. Use the newest articles when your IRA question is more specific.
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