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Where’s the Money? Issue #7 – Part 2: Traditional IRA vs Roth IRA: Understanding Your Retirement Savings Options

Jul 5, 2026 | Frederick, Live Like Locals

It’s HOT! We hope you are enjoying summer and the 250th celebration of America.

Last week, we discussed what an IRA is and the core differences between the Traditional IRA and the Roth IRA. This week, we will take a closer look in our multiple-part series to discuss the differences between the Traditional IRA and the Roth IRA and how to understand them. (For educational purposes only. This article does not constitute personalized tax, legal, or investment advice. Please consult a qualified financial advisor or tax professional regarding your individual situation.)

 

Traditional IRA: A Closer Look

Potential Tax Deduction

Contributions to a Traditional IRA may be tax-deductible, which can reduce your taxable income for the year you contribute. However, deductibility depends on two factors:

  1. Whether you (or your spouse) are covered by a workplace retirement plan such as a 401(k).
  2. Your modified adjusted gross income (MAGI). For 2026, the deduction phases out for single filers covered by a workplace plan with MAGI between $81,000 and $91,000, and for married filing jointly between $129,000 and $149,000.
  3. Married Filing Jointly (contributor is not covered, but spouse is covered): Full deduction up to $242,000; partial deduction between $242,000 and $252,000; no deduction above $252,000.
  4. Married Filing Separately: Phase-out range is between $0 and $10,000.

If you are not covered by a workplace plan, you can typically deduct the full contribution regardless of income. Below are two charts to show the changes from 2025 to 2026 in the MAGI limits.

 

Well, that’s enough for Part 2. Next week, we will dive again deeper, again, and take a closer look at some differences between the Traditional IRA and the Roth IRA. 

(This article is intended for general educational purposes only and reflects tax rules for the 2026 tax year. Tax laws are subject to change. This content does not constitute personalized investment, tax, or legal advice. Individual results will vary. Please consult a qualified financial advisor, tax professional, or attorney before making retirement planning decisions.

I hope to meet you at the next Live Like Locals Social event on July 9th at Kia Country of Savannah, from 5:30 pm to 7:30 pm! There will be networking opportunities, prizes, and free Pizza from Stoners Pizza Joint in Pooler.

 

Thought for the Week: 

“Nobody climbs a mountain by accident. Move with intentionality to grow in anything you do.” 

 

About The Author

Frederick Hogsett, Jr. is a licensed financial coach with almost 30 years of experience helping individuals, families, small businesses, and nonprofit organizations. He recently opened an office in Savannah, Georgia, and can be reached at (803) 463-2773 or by website at www.livemore.net/fhogsettjrclient.

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