retirement

IRA Comparison Chart

Traditional IRAs can let your money grow tax-deferred, while Roth IRAs may allow your money to grow tax-free. Use the chart below to understand what works for you.

Traditional IRA Roth IRA
The Basics Money that you contribute may be deductible on your annual income taxes. Your contributions and any gains are not taxed until you withdraw your money. Your contributions are not tax deductible, but upon reaching retirement, you can withdraw your contributions and any gains tax-free.
Eligibility & Deductions You can make contributions to a Traditional IRA if:
  • You or your spouse received taxable income during the year, and
  • You will not reach age 70½ by the end of the year.
Contributions are typically tax-deductible. However, it depends on income limits and if you participate in a retirement plan at work. Check with your tax advisor before taking a deduction or refer to www.irs.gov.
You can make contributions to a Roth IRA if:
  • You or your spouse received taxable income during the year, and
  • You file taxes jointly and your adjusted gross income is less than $188k, or
  • You file taxes individually and your adjusted gross income is less than $127k.
There are no age restrictions for Roth IRAs.
Contribution Limits & Deadlines

$5,500 by 4/15/14

Those age 50+ by the end of the calendar year can make an additional $1,000 "catch-up" contribution.

The limit can be split between a Traditional and Roth IRA but the combined limit is $5,500 or $6,500 as stated above.

$5,500 by 4/15/14

If your adjusted gross income is at least $178k but less than $188k (filing jointly) or is at least $112k but less than $127k (filing individually), you may be able to contribute a partial amount.

Penalty-free Distributions Available once you reach 59½. Earlier distributions may be subject to penalties. Available once you reach 59½ as long as it has been 5+ years since you first established and contributed to your Roth IRA. Earlier distributions may be subject to penalties.
Required Minimum Distributions (RMD) Begin at age 70½. RMDs not required.