| |
Traditional
IRA |
Roth
IRA |
|
Age
Requirements |
- No Minimum Age Limit
- No contributions
after age 70 ˝.
|
- No age limit.
- No required
distributions prior to death.
|
|
Income
Eligibility |
Must
have taxable compensation for the year. |
- Must have taxable
compensation for the year.
- Full contributions
are allowed for individuals with gross income
(MAGI) of up to $105,000 for single and $166,000
if married filing jointly.
- Partial contributions
allowed for MAGI between $105,000 - $120,000
if single, and between $166,000 - $176,000 for
married filing jointly.
- Participation
in an employer retirement plan does not affect
eligibility.
|
|
Spousal
Eligibility |
May
be open to non-working spouse |
May
be open to non-working spouse |
|
Maximum
Annual Contributions |
- $5,000 for
individual or $10,000 for married couples, or
100% of compensations, if less.
- An additional
$1000 may be contributed for individuals who
are at least 50 years old in the year of contribution.
|
- $5,000 for
individual or $10,000 for married couples, or
100% of compensations, if less.
- An additional
$1000 may be contributed for individuals who
are at least 50 years old in the year of contribution.
|
|
Tax
Considerations |
- Earnings grow
tax-deferred.
- Withdrawals
taxed as ordinary income.
- IRS penalties
apply if withdrawals are made prior to age 59
˝ or qualified exception (including first-time
home purchase- up to $10,000, qualified education
expenses, death, or disability).
|
- Contributions
are not tax deductible.
- Earnings are
tax-deferred and can be withdrawn tax-free if
the account has been open for 5 years or more
and distributions are made on or after the age
of 59 ˝ or qualified exceptions (including first-time
home purchase –up to $10,000, qualified education
expenses, death, or disability).
|
|
Required
Distribution |
Distribution
must begin by April 1st of the year
after tuning 70 ˝ years old. |
You
are not required to take distributions from your
Roth IRA. |
|
Benefits |
- Allows you
to make your own decisions about the investments
in your retirement account.
- Invest in stocks,
mutual funds, bonds and more
- Earnings and
interest are tax-deferred
- Contributions
may be tax-deductible
- Ability
to roll over 401k plans
|
- Allows you
to make your own decisions about the investments
in your retirement account
- Earnings growth
is tax-free when requirements are met
- No
required minimum distributions from the account
|
