Is a Traditional or Roth IRA right for you? Compare the differences.
|
Traditional IRA |
|
Roth IRA |
| Summary |
May allow you to deduct
contributions on your income taxes
now. Investment grows tax-deferred
and then is subject to income tax
when withdrawals are made. |
|
If you meet eligibility requirements
you can make after-tax
contributions and the money
withdrawn after retirement may
be free from federal taxes. |
| Age Eligibility |
You can contribute up to age 70 1/2
as long as you have earned income.
|
|
You can contribute at any age as
long as you have earned income and
meet the income requirements.
|
| Income Eligibility |
No income requirements.
|
|
For the 2011 tax year:
- Full contribution if MAGI is less
than $107,000 (single) or
$169,000 (joint)
-
Partial contribution if MAGI is
less than $122,000 (single) or
$179,000 (joint)
|
| Maximum Annual Contribution Per Eligible Individual |
$5,000 ($6,000 age 50 and
older) for the 2011 tax year. |
|
$5,000 ($6,000 age 50 and older)
for the 2011 tax year |
| Withdrawal Penalty |
10% IRS early withdrawal penalty if
withdrawn before age 59 1/2.
Possible exceptions apply. |
|
10% IRS early withdrawal penalty
if earnings are withdrawn before
age 59 1/2. Possible exceptions
apply.
Contributions are not subject to
withdrawal penalties.
|
| Mandatory Withdrawal Age |
Distribution must begin at
age 70 1/2. |
|
None |
Contact us for more information.
- 1
- Please consult your tax advisor.
- 2
- Monthly Adjusted Gross Income