Is a Roth IRA better than a Traditional IRA?

Neither is universally better. The comparison depends on factors such as your tax situation today, how you expect it to change in retirement, contribution eligibility, existing retirement funds and required distributions. A qualified tax professional can help evaluate your circumstances.

Can I contribute to both a Traditional IRA and a Roth IRA?

Yes, if you meet the applicable requirements. Traditional and Roth IRA contributions share one annual limit across all of your IRAs. For 2026, that limit is $7,500, or $8,600 if you are 50 or older by year-end.

Can I have a Roth IRA if my income is too high to contribute?

Yes. Roth IRA income limits apply to regular contributions, not to owning an existing Roth IRA. They also do not prevent Roth conversions, although a conversion can create taxable income and reporting requirements.

Are Traditional IRA contributions always deductible?

No. Your income, filing status and workplace retirement plan coverage can limit or eliminate the deduction. You may still be eligible to make a nondeductible Traditional IRA contribution.

Can I convert a Traditional IRA to a Roth IRA?

Yes. A Roth conversion moves eligible pre-tax retirement funds into Roth treatment. Previously untaxed amounts are generally included in taxable income for the year of the conversion.

Do Roth IRAs have required minimum distributions?

Not for the original owner during their lifetime. Traditional IRAs generally require minimum distributions later in retirement. Different rules apply to inherited Roth IRAs.

Can both Traditional and Roth IRAs hold bitcoin?

Yes, both our Traditional and Roth IRAs can hold bitcoin. Traditional and Roth describe the account’s tax treatment; either structure can hold bitcoin through a self-directed IRA that supports it.

Traditional vs. Roth IRA

Understand the differences and tradeoffs between Traditional and Roth IRAs.

Bitcoin Well IRAs are scheduled to launch in fall 2026.

Loading the IRA quiz…

Roth IRA vs. Traditional IRA:
the key differences

Our Traditional and Roth IRAs can both hold bitcoin.
What changes is how the account is taxed.

Contributions
Traditional IRA
Contributions may be deductible, depending on your income and workplace retirement plan coverage.
Roth IRA
Contributions are made with after-tax dollars and are not deductible.
Withdrawals
Traditional IRA
Pre-tax contributions and earnings are generally taxed as ordinary income when withdrawn.
Roth IRA
Qualified withdrawals are (generally) federally tax-free.
Income limits
Traditional IRA
There is no income limit for contributing, though the deduction may be limited.
Roth IRA
Income and filing status can limit direct contributions.
Required withdrawals
Traditional IRA
RMDs generally apply during the original owner’s lifetime.
Roth IRA
No RMDs for the original owner during their lifetime.

Federal tax differences between Traditional and Roth IRAs
What changes	Traditional IRA	Roth IRA
Contributions	Contributions may be deductible, depending on your income and workplace retirement plan coverage.	Contributions are made with after-tax dollars and are not deductible.
Withdrawals	Pre-tax contributions and earnings are generally taxed as ordinary income when withdrawn.	Qualified withdrawals are (generally) federally tax-free.
Income limits	There is no income limit for contributing, though the deduction may be limited.	Income and filing status can limit direct contributions.
Required withdrawals	RMDs generally apply during the original owner’s lifetime.	No RMDs for the original owner during their lifetime.

Future tax rate can shape the decision

Part of the Roth vs. Traditional decision involves forecasting future financial situations.

Tax rate is higher in retirement

Paying tax earlier can become more attractive because qualified withdrawals can be federally tax-free later.

This tends to favor Roth treatment.

Tax rate is lower in retirement

Deferring tax can become more attractive because taxable withdrawals may occur at a lower rate than applies today.

This tends to favor Traditional treatment.

A qualified tax professional can help you determine which treatment makes more sense for your income, retirement plans and broader tax situation.

Understand the account

How a Traditional IRA works

Investments in a Traditional IRA grow tax-deferred. When you withdraw money, pre-tax contributions and earnings are generally taxed as ordinary income.

Depending on your income and workplace retirement plan coverage, contributions may also be deductible today.

Yellow hourglass illustrating paying taxes earlier or later

Contributions and deductions

You can generally contribute to a Traditional IRA if you have taxable eligible compensation. There is no income ceiling for making a contribution, but the annual IRA contribution limit still applies.

Whether that contribution is deductible is a separate question. It can depend on your income, filing status, and whether you or your spouse are covered by a workplace retirement plan.

Nondeductible does not mean Roth

A Traditional IRA contribution can still be made with after-tax dollars when a deduction is unavailable.

That does not make the account Roth. The after-tax amount becomes basis, while future earnings generally remain tax-deferred rather than becoming qualified Roth earnings.

Withdrawals and required distributions

Traditional IRA withdrawals are generally taxed as ordinary income to the extent they come from pre-tax contributions and earnings.

Traditional IRAs are also subject to required minimum distributions (RMDs) later in retirement.

What this means for bitcoin

If bitcoin is bought or sold within the account, taxes are generally deferred while the funds remain inside the IRA. When taxable amounts are distributed, they are generally taxed as ordinary income rather than as personal long-term capital gains.

Understand the account

How a Roth IRA works

Roth IRA contributions are made with after-tax dollars, so there is no upfront tax deduction. In return, qualified withdrawals later in retirement can be federally tax-free.

Contributions and conversions

Roth IRA contributions are made with after-tax dollars and are not deductible. Income and filing status can limit how much you can contribute directly.

A Roth conversion works differently. It moves eligible retirement funds into Roth treatment and can create taxable income on previously untaxed amounts.

Qualified withdrawals

Qualified Roth IRA withdrawals can be federally tax-free, including earnings.

For most retirement withdrawals, that generally means meeting both:

the Roth IRA five-year holding requirement
a qualifying condition, such as reaching age 59½

Contributions, conversions and earnings are treated differently

Not every dollar in a Roth IRA follows the same withdrawal rules.

Regular contributions, converted amounts and investment earnings can receive different tax treatment when withdrawn, especially before retirement age or before applicable holding periods are met.

No lifetime RMDs for the original owner

Roth IRAs do not require the original owner to take required minimum distributions during their lifetime.

That can provide more flexibility over when retirement funds are withdrawn. Beneficiaries are still subject to inherited-account distribution rules.

Rollovers and Roth conversions

Moving retirement money doesn’t always mean changing its tax treatment. A rollover can preserve the existing structure, while a Roth conversion generally changes pre-tax money into Roth treatment.

Pre-tax funds → Traditional IRA

An eligible direct rollover from a pre-tax workplace plan to a Traditional IRA generally preserves tax deferral. A properly handled transfer between Traditional IRAs also does not create current income tax.

Pre-tax funds → Roth IRA

Moving pre-tax retirement funds into a Roth IRA is known as a Roth conversion, with previously untaxed amounts included in your taxable income during the conversion year.

Roth funds → Roth IRA

Eligible Roth retirement funds generally roll into a Roth IRA and keep their Roth tax treatment.

2026 IRA contribution and income limits

The combined contribution limit across your Traditional and Roth IRAs is $7,500 (or $8,600 if you’re 50 or older).

Rollovers and conversions do not count toward this annual limit.

Traditional IRA deduction limits for 2026

Within the applicable range, the deduction may be reduced. At or above the upper endpoint, it is eliminated.

Single or head of household; you are covered at work: $81,000–$91,000
Married filing jointly; you are covered at work: $129,000–$149,000
Married filing jointly; spouse is covered at work: $242,000–$252,000

If neither you nor your spouse is covered by a workplace retirement plan, these income-based deduction phaseouts generally do not apply. Different rules apply for married filing separately.

Yellow retirement calendar with a bitcoin symbol

Roth IRA income limits for 2026

Your ability to contribute directly to a Roth IRA depends on your modified adjusted gross income (MAGI) and filing status.

Single or Head of Household
Full contribution
Below $153,000
Phaseout range
$153,000 to below $168,000
No contribution
$168,000 or more
Married filing jointly
Full contribution
Below $242,000
Phaseout range
$242,000 to below $252,000
No contribution
$252,000 or more

2026 Roth IRA regular contribution eligibility by filing status and MAGI
Filing status	Full contribution	Phaseout range	No contribution
Single or Head of Household	Below $153,000	$153,000 to below $168,000	$168,000 or more
Married filing jointly	Below $242,000	$242,000 to below $252,000	$252,000 or more

Married filing separately: different rules apply if you lived with your spouse during the year.

Frequently asked questions

Keep up with the Bitcoin IRA launch

Traditional and Roth options are coming soon to Bitcoin Well.

Join the waitlist for updates while you explore which account structure fits your circumstances.

Bitcoin Well does not provide tax, legal, or investment advice. Information on this page is provided for general educational purposes only and is not a recommendation to open, fund, convert, or roll over an IRA. IRA eligibility, contribution limits, rollover options, and tax treatment depend on individual circumstances and applicable rules. Consult a qualified tax, legal, or financial professional regarding your situation.

This guide summarizes general US federal IRA rules reviewed September 15, 2026. State taxes and individual circumstances may differ. Annual limits can change. Publications 590-A and 590-B are the latest available editions at review; 2026 dollar limits are checked against the IRS 2026 announcement. Examples are simplified illustrations, not projections or personalized recommendations.

Bitcoin can lose substantial value. An IRA does not remove investment, custody or liquidity risk. Bitcoin Well’s Bitcoin IRA is pre-launch; availability, supported transactions, fees and account terms are governed by the final product and provider documentation.