What Is a Roth IRA? 2026 Limits, Rules, Withdrawals, and Backdoor Roth

A Roth IRA is an individual retirement account funded with after-tax money. A Roth IRA account can hold cash, funds, stocks, bonds, and other investments allowed by the custodian. Qualified withdrawals are tax-free. The account owner has no lifetime required minimum distributions.

"Tax-free" has rules. Contribution eligibility depends on earned income and modified adjusted gross income. Withdrawals distinguish regular contributions, conversions, and earnings. A backdoor Roth IRA can also trigger the pro-rata rule and Form 8606.

Keep three buckets in mind. First is money you put in. Next is money you convert. Last is the growth. The tax rule can treat each bucket in a different way.

2026 Roth IRA contribution and income limits

For 2026:

the combined traditional and Roth IRA contribution limit is $7,500;

the age-50-or-older catch-up is $1,100; and

contributions cannot exceed eligible compensation.

Direct Roth IRA contribution phaseouts are:

Filing status | 2026 modified adjusted gross income phaseout
Single or head of household | $153,000 to $168,000
Married filing jointly | $242,000 to $252,000

Married filing separately after living with a spouse during the year has a much narrower rule. Use the current IRS worksheet.

2026 limits and phaseouts from the IRS retirement-limit announcement. The traditional and Roth IRA limit is combined.

The contribution deadline is generally the federal tax-return due date, without extensions, for that tax year. A Roth conversion uses different timing.

Traditional IRA versus Roth IRA

Question | Traditional IRA | Roth IRA
Contribution | May be deductible, subject to rules | Not deductible
Growth | Tax deferred | Tax deferred
Qualified retirement withdrawal | Generally taxable | Tax-free
Owner lifetime RMD | Generally yes | No
Direct contribution income limit | Deduction rules vary | Direct Roth eligibility phases out

The better account depends on current and future tax rates, deduction eligibility, cash flow, state tax, time horizon, and other retirement accounts.

Roth IRA withdrawal rules

Roth IRA distributions are generally ordered:

regular contribution basis;

conversion and rollover amounts, first in, first out; and

earnings.

Regular Roth IRA contributions can generally be withdrawn without income tax or the 10% additional tax because they were already taxed. That does not mean using retirement money early is costless. The lost invested time can be large.

Conversions and earnings have separate rules. Do not describe every Roth withdrawal as tax-free.

The ordering rules come from IRS Publication 590-B. Tax and penalty treatment still depends on age, timing, and the reason for distribution.

The Roth IRA five-year rules

People often talk about one "Roth five-year rule." There is more than one clock.

Qualified-distribution clock

For earnings to be part of a qualified distribution, the five-tax-year period generally begins with the first tax year for which a contribution was made to any Roth IRA for the owner. Another qualifying event, such as reaching age 59½, must also apply.

Conversion penalty clocks

Each conversion can have its own five-tax-year period for the 10% additional-tax rules when someone is under 59½. Exceptions can apply.

The clocks answer different questions. One concerns qualified tax-free earnings. The others can concern an early-distribution penalty on converted amounts.

How a backdoor Roth IRA works

A backdoor Roth IRA is a two-step process often used when income is too high for a direct Roth contribution:

make a contribution to a traditional IRA; and

convert an amount to a Roth IRA.

The name is informal. The tax reporting is real.

The pro-rata rule generally looks at all traditional, SEP, and SIMPLE IRA balances at year-end when calculating the taxable share of a conversion. You cannot simply label one after-tax dollar as the only dollar converted while ignoring pre-tax IRA money.

Form 8606 tracks nondeductible basis and reports conversions.

A backdoor Roth is not a one-click loophole. The flow is based on IRS Form 8606 instructions and IRA aggregation rules.

Before using it, check:

existing pre-tax IRA balances;

contribution eligibility and deadline;

whether the contribution is deductible;

conversion tax;

state treatment;

account values on the conversion and year-end dates; and

correct Form 8606 history.

Roth conversions

A Roth conversion is not limited by the direct-contribution income phaseout. It can create taxable income.

A conversion may be useful in a lower-income year or as part of a multi-year retirement tax plan. It may be harmful when it raises the marginal rate, Medicare premiums, health-insurance credit cost, capital-gain rate, or cash strain.

See the tax planning strategies guide for the full conversion check.

Inherited Roth IRA rules

The original Roth IRA owner has no lifetime RMD. Beneficiaries can have required-distribution and account-emptying rules.

The answer depends on whether the beneficiary is a spouse, an eligible designated beneficiary, another individual, a trust, an estate, or another entity. A surviving spouse may have choices that another beneficiary does not.

Do not assume that "Roth has no RMD" applies after the owner's death.

How to open a Roth IRA

Confirm eligible compensation and direct-contribution income limits.

Choose a regulated custodian.

Compare account fees, investment choices, service, and automation.

Name beneficiaries.

Fund the account using the correct tax year.

Choose investments. Opening the account alone does not invest the cash.

Keep contribution and Form 8606 records.

The index funds and ETFs guide explains how to compare common investment choices.

Common questions

Can a child have a Roth IRA?

Yes, if the child has eligible compensation. The contribution cannot exceed that compensation or the annual limit. A custodian may control the account while the child is a minor.

Can I contribute if my income is too high?

A direct Roth IRA contribution may be reduced or unavailable. A conversion is a separate rule, and the backdoor Roth process can involve pro-rata tax and Form 8606.

Are Roth IRA earnings always tax-free?

No. Earnings are tax-free when the distribution is qualified. A nonqualified distribution can make earnings taxable and may add a 10% tax unless an exception applies.

Does a Roth IRA have required minimum distributions?

The original owner does not have lifetime RMDs. Beneficiaries have separate rules after death.

This guide is general federal tax education, not tax or investment advice. IRA limits, phaseouts, forms, and inherited-account rules change. Use current IRS instructions for your tax year.

Sources

Internal Revenue Service, 2026 retirement contribution limits. Accessed July 30, 2026.

Internal Revenue Service, Roth IRAs. Accessed July 30, 2026.

Internal Revenue Service, Topic 309: Roth IRA contributions. Accessed July 30, 2026.

Internal Revenue Service, Publication 590-A: Contributions to Individual Retirement Arrangements. Accessed July 30, 2026.

Internal Revenue Service, Publication 590-B: Distributions from Individual Retirement Arrangements. Accessed July 30, 2026.

Internal Revenue Service, Instructions for Form 8606. Accessed July 30, 2026.

Internal Revenue Service, required minimum distribution FAQs. Accessed July 30, 2026.

Internal Revenue Service, retirement topics: beneficiary. Accessed July 30, 2026.

Internal Revenue Service, Topic 451: Individual Retirement Arrangements. Accessed July 30, 2026.

Internal Revenue Service, Ten Differences Between a Roth IRA and a Designated Roth Account. Accessed July 30, 2026.