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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.) 2014: $5,500
Catch-up contributions for age 50 and older is an additional $1,000 annually.
  • Same as traditional IRA
  • Must have household Modified Adjusted Gross Income (MAGI) of $114,000 or less (single) or $181,000 or less (married) to make maximum contribution.*
  • Individuals with MAGI $114,000 – $129,000 or married couples with MAGI $181,000 – $191,000 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
    $60,000 (single) or $96,000 (married).*
  • Individuals with MAGI $60,000 – $70,000 or married couples filing jointly with MAGI $96,000 – $116,000 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.

*2014 tax year

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