Compare IRAs

Individual Retirement Accounts (IRAs) are a smart way to save for retirement. Not sure which one is right for you? Compare Roth and Traditional IRAs with our chart.

  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) less than:
  • (2019) $122,000 if single and $193,000 if married and filing jointly
  • (2018) $120,000 if single and $189,000 if married and filing jointly
How much can I contribute each year?

For 2018, your total contributions cannot be more than:

  • $5,500 (additional $1,000 catch-up contribution if over age 50), or
  • your taxable compensation for the year.

For 2019, your total contributions cannot be more than:

  • $6,000 (additional $1,000 catch-up contribution if over age 50), or
  • your taxable compensation for the year.

The IRA contribution limit does not apply to:

  • Rollover contributions
  • Qualified reservist repayments
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.

You must begin taking distributions by April 1 following the year in which you turn 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 are a first-time homebuyer ($10,000 lifetime limit).
  • You are using the withdrawal to pay for certain higher education expenses.
  • Certain conditions are met for unemployment or qualifying medical expenses.
  • The distribution was a result of disability or death.

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:

  • You are a first-time homebuyer ($10,000 lifetime limit).
  • You are disabled when you make the withdrawal.
  • Withdrawals are made by your beneficiary after you die.
Is there a penalty tax on insufficient withdrawals after age 70½? Yes, failure to take the total required minimum distribution each year may result in a 50% excise tax on the amount not distributed. Not applicable

The advice provided is for informational purposes only. Contact a financial advisor or tax or legal professional for additional guidance.

Next Steps

Choose a way to request your Traditional or Roth IRA.