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 (total maximum contributions to any IRA or combination of IRAs must not exceed the annual contribution limits for that year)	2013: $5,500 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 $112,000 or less (single) or $178,000 or less (married) to make maximum contribution.* Individuals with MAGI $112,000 – $127,000 or married couples with MAGI $178,000 – $188,000 may make smaller contributions.*
Deductibility of contributions	Fully income tax-deductible (federal) if not covered by an employer-sponsored retirement plan. Fully income tax-deductible (federal) if covered by an employer-sponsored retirement plan and household MAGI is below $58,000 (single) or $92,000 (married).* Individuals with MAGI $58,000 – $68,000 or married couples filing jointly with MAGI $92,000 – $112,000 may make partially deductible contributions.*	Not tax-deductible.
Earnings	Income tax-deferred.	Federally 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).
Taxation on withdrawals	Withdrawals are taxed as ordinary income (except those representing nondeductible contributions).	Contributions – federally tax-free at any time. Taxation on earnings – see above.
Early withdrawal considerations	Withdrawals taken prior to age 59½ are subject to a 10% IRS-imposed penalty unless one of several conditions is met. They include: Death or disability Catastrophic medical expenses First-time home purchase (up to $10,000) Higher education Substantially equal periodic payments Additional exceptions may apply	Withdrawals of earnings which do not meet the five-year exception are subject to a 10% IRS-imposed penalty unless one of several conditions is met. This includes: Age 59½ Death or disability Catastrophic medical expenses First-time home purchase (up to $10,000) Higher education Substantially equal periodic payments Additional exceptions may apply
Distribution rules	Must begin withdrawing by April 1 of the year after you reach age 70½.	Not required to take distribution by any certain age.

*2013 tax year

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