Pros & Cons of Roth IRAs

Advantages and Disadvantages of Roth IRAs

Saving for retirement is critical to financial security. Fortunately, the government provides some tax incentives, if you qualify. Even though Roth IRAs have been around for more than a decade, many people are not aware of exactly how they work. They also may not know that there are no longer income restrictions in place to convert a traditional IRA into a Roth.

If you qualify, you can make a contribution to a Roth IRA of $7,000 in 2025 (and 2024) or $8,000 if you are age 50 or older.

Here are the basic advantages and disadvantages of the accounts, as well as how they differ from traditional IRAs.

This chart only covers some of the advantages and disadvantages of Roth IRAs. The complexity of the tax laws covering traditional and Roth IRAs can make it difficult to decide between the options. Consult with your tax advisor about the best way to make contributions to retirement accounts to maximize the tax benefits and your future financial security.

*Note: Under Secure 2.0, the required age used to determine distributions increased from age 72 to 73, starting on January 1, 2023. It will increase again to age 75 starting on January 1, 2033. (Previously, under the original Secure Act of 2019, the age rose from 70 1/2 under prior law, to 72.)