Traditional vs. Roth: IRA Preference Differs by Generation
November 6, 2025
With traditional IRAs, contributions are tax deductible for those with incomes below certain levels, but withdrawals in retirement will be taxed as ordinary income. Roth contributions are made with after-tax money, but qualified distributions are tax-free.* For investors who expect to be in a higher tax bracket in retirement, a Roth may be more beneficial in the long run — which is why they tend to appeal to younger generations. Overall, about 33% of U.S. households own traditional IRAs, compared with 26% who own Roth IRAs.
Percentage of U.S. households who owned traditional or Roth IRAs in 2024, by generation
Baby Boomers
Traditional: 46%
Roth: 24%
Gen X
Traditional: 31%
Roth: 28%
Millennials
Traditional: 20%
Roth: 29%
Gen Z
Traditional: 12%
Roth: 25%
*A Roth distribution is considered qualified if the account is held for five years and the account owner reaches age 59½, dies, or becomes disabled. (Other exceptions may apply.)
Source: Investment Company Institute, 2025
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