The Roth-vs.-Traditional IRA question has a clear answer for most people once you walk through six yes/no decisions but each step is gated by 2026 IRA income and contribution thresholds that just changed.

The College Investor's updated decision tree condenses our massive traditional vs. Roth IRA explainer guide into a single flowchart. Here's how to use it

By The Numbers

• $7,500 — IRA contribution limit if you're under 50
• $8,600 — Limit if you're 50 or older
• $153K-$168K — Roth IRA MAGI phase-out for single filers
• $242K-$252K — Roth IRA MAGI phase-out for married filing jointly
• $81K-$91K — Traditional IRA deduction phase-out for single filers covered by a workplace plan
• $129K-$149K — Traditional IRA deduction phase-out for married filing jointly when the contributor is covered

How To Use The IRA Decision Tree

Step 1: Earned compensation. Wages, self-employment, commissions, or a spouse's earned income all count. Without it, no IRA contributions.

Step 2: Roth income test. Under the Modified Adjusted Gross Income (MAGI) cap? You can contribute directly. Over it? Consider the Backdoor Roth path — a non-deductible Traditional contribution that you can convert to a Roth.

Step 3: Workplace plan coverage. A 401(k), 403(b), SEP IRA, SIMPLE IRA, or pension from any employer flips you into the "covered" bucket — even if you don't participate. Availability is what counts, not participation.

Step 4: Traditional deduction test. If you or your spouse are covered and income is above the phase-out, the Traditional IRA deduction disappears. Roth becomes the clear winner because you'd otherwise be paying tax on the way in and losing tax-free withdrawals.

Step 5: The discipline check. When a Traditional IRA deduction is on the table, the math favors it — but only if you actually invest the tax refund.

According to financial planner Larry Russell, "for savers who reinvest the tax savings, Traditional wins. For savers who spend the refund, Roth wins by forcing discipline."

What To Watch Out For: The 2026 phase-outs shifted. Single covered filers lose deductibility $2,000 earlier than in 2025 (range now starts at $81K vs. $79K), and the Roth MAGI cap for married filing jointly jumped to $242K-$252K. If you were near a limit last year, rerun the tree before making a 2026 contribution.

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