Traditional vs Roth Comparison

 Traditional IRARoth IRA
Tax Benefits
  • Tax-deferred growth: all interest earned is tax sheltered until withdrawn.
  • Deductible contributions: you may deduct contributions from your taxable income. How much you may deduct depends on your marital status, wage income and employee pension status.
  • Tax-free growth: keep your Roth IRA for at least five years, withdraw funds for the approved reasons (see below) and you will never have to pay tax on the interest you earn.
  • Not tax deductible: you may not deduct Roth contributions from your taxable income.
Eligibility
  • Any wage-earner or non-working spouse may contribute.
  • Contributions have no age requirement .
  • Any wage-earner or non-working spouse may contribute.
  • Contributions have no age requirement .
Contribution
  • The contribution limit is $7,000 per person.
  • Catch-up contributions (Age 50 and above) is an additional $1,000 per person.
  • The contribution limit is $7,000 per person.
  • Catch-up contributions (Age 50 and above) is an additional $1,000 per person.
Income Limitations
  • None
  • Singles – your Modified Adjusted Gross Income (MAGI) must be under $161,000.
  • Married and file jointly – your MAGI must be under $240,000.
Withdrawal
  • At age 59 ½ you may withdraw funds without penalty.
  • Exceptions: you may withdraw prior to 59 ½ without penalty in the case of death, disability, specific qualified medical expenses or for a child’s college education.
  • Required minimum distributions must begin at age 72.
  • Withdrawals are generally tax-free and penalty-free if you are 59 ½ or over and have held the account for at least five years, if you are making a first home purchase, or in the case of death or disability.
  • There are no required minimum distributions.
Conversion
  • You may convert funds from your regular IRA to a Roth IRA. 

Please remember to consult a financial or tax professional about saving for your retirement before you make your investment.

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