IRA Comparison Chart

Compare Traditional IRAs and Roth IRAs

IRAs offer versatility and a wide range of investment options. Compare the main features of each offering to help you choose the IRA that matches your retirement goals.

FeatureTraditional IRARoth IRA
Tax-deductible contributionsYes¹No
Tax-deferred growthYesN/A
Tax-free growthNoYes
Tax-free qualified withdrawalsNoYes
Ability to dedcut affected by participation in an employer-sponsored planYesN/A
Eligibility dependent on income levelsNo²Yes
Contributions allowed after age 701/2NoYes
Minimum withdrawals required beginning at age 70½YesNo
Penalty-free withdrawals for qualified higher education expensesYesYes³
Withdrawals after age 591/2 taxed as ordinary incomeYesNo4
Estate-friendly provisionsNoYes

 

  1. Subject to income limits and other conditions
  2. Contribution limits are the lesser of $5,000 of 100% of taxable compensation for tax year 2008 and tax year 2009.  Taxpayers age 50 and over may qualify for an additional “catch up” contribution of $1,000 for 2008 and $1,000 for 2009.  The deadline to make contributions for the 2008 tax year is April 15, 2009.  For tax year 2005, contribution limits are the lesser of $4000 or 100% of the individual's taxable compensation. Individuals over age 50 qualify for additional "catch-up" contributions.
  3. Earnings withdrawn for education purposes are taxable but not subject to IRS penalties
  4. Must also meet the Roth IRA 5-year aging period

 

You can invest in both – as long as you qualify and the combined contribution does not exceed the maximum allowable amount.

You can invest in both a Traditional IRA and a Roth IRA for the same tax year as long as you meet each IRA’s qualifications.  The total amount you can contribute cannot exceed the maximum allowable amount of $5,000 for 2008 and $5,000 for 2009.

Next Steps:

  1. Determine which IRA is right for you
  2. Review the Traditional IRA information if you choose this IRA
  3. Review the Roth IRA information if you choose this IRA
  4. Don’t miss the deadline for making your contribution

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