|Traditional IRA||Roth IRA|
|Am I eligible?||You must have earned income and be under age 70½ in the year the contribution is made.||No age limit, however for full contribution you must have a modified adjusted gross income (MAGI) below:
|How much can I contribute each year?||
|What is a "Catch-up Contribution?"||If you are age 50 or older in the year of contribution, eligible IRA account holders can make an additional contribution of $1,000.||If you are age 50 or older in the year of contribution, eligible IRA account holders can make an additional contribution of $1,000.|
|Can I deduct my contribution?||
If you are not an active participant in an employer-sponsored retirement plan, such as a 401(k), your entire contribution is tax deductible.
If you are an active participant in an employer-sponsored retirement plan, your contribution may be completely or partially deductible.
|Contributions are not tax deductible.|
|Is there a deadline for account opening and contributions?||Opening the account and making contributions for a specific year must be made by the tax filing deadline for that year.||Opening an account and making contributions for a specific year must be made by the tax filing deadline for that year.|
|Is there a penalty tax on excess contributions?||Yes, the IRS imposes a 6% penalty tax on excess contributions.||Yes, the IRS imposes a 6% penalty tax on excess contributions.|
|When must I begin taking distributions?||
You may begin taking contributions at 59½ without any penalties.
Distributions must begin by April 1 of the year after turning age 70½.
|There is no mandatory age for taking distributions.|
|Do I pay income taxes on withdrawals?||Yes. Any withdrawals (except nondeductible contributions) are subject to regular income taxes.||Qualified withdrawals of contributions are tax-free. (see below)|
|Can I make withdrawals prior to 59½||
Penalty-free withdrawals before age 59½ are allowed if:
You have the ability to withdraw your principal and earnings completely tax-free if the IRA has been open for five or more years and at least one of the following conditions are met:
|Is there a penalty tax on insufficient withdrawals after age 70½?||Yes, failure to take the total required minimum distribution each year will result in a 50% penalty on the amount not distributed.||Not applicable|
For more information on which IRA may be most appropriate for you or to discuss your retirement planning options, you can contact our financial planners at 877.367.5428 or firstname.lastname@example.org
This is for information purposes only and is not to provide tax or legal advice regarding your situation. For tax or legal advice, please contact your tax or legal professional.