For Individuals: How do a traditional IRA and the Roth IRA compare?

This chart compares the features and benefits of a traditional IRA and Roth IRA.

	Traditional IRA	Roth IRA
Eligibility	Under age 70½ with earned income.	Eligible wage earners of any age. Subject to limitations; see below.
Annual contribution limits (if contributing to both traditional and Roth IRA, combined total cannot exceed limit)	2011: $5,000 Catch-up contributions for age 50 and older is an additional $1,000.00 annually.	Same as traditional IRA Must have household Modified Adjusted Gross Income (MAGI) of $107,000 or less (single) or $169,000 or less (married) to make maximum contribution.* Individuals with MAGI $107,000 – $122,000 or married couples with MAGI $169,000 – $179,000 may make smaller contributions.*
Deductibility of contributions	Fully tax-deductible (federal) if not covered by an employer-sponsored retirement plan. Fully tax-deductible (federal) if covered by an employer-sponsored retirement plan and household MAGI is below $56,000 (single) or $90,000 (married). Individuals with MAGI $56,000 – $66,000 or married couples with MAGI $90,000 – $110,000 may make partially deductible contributions.*	Not tax-deductible.
Earnings	Tax-deferred.	Federally income tax-free if taken after five years and meet any one of the following: age 59½, death, disability, first time home purchase (up to $10,000).
Withdrawals	Taxable.	Contributions – federally tax-free at any time. Taxation on earnings – see above.
Penalties for early withdrawal	10% IRS imposed penalty before age 59½ except for death, disability, catastrophic medical expenses, and first home purchase.	10% IRS imposed penalty on earnings if taken before age 59½ or within five years except for death, disability, catastrophic medical expenses, and first home purchase.
Distribution rules	Must begin withdrawing by April 1 of the year after you reach age 70½.	During lifetime, not required to take money by any certain age.

*2011 tax year

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