Traditional IRA vs Roth IRAs

Deciding between a traditional IRA vs Roth IRA is important and completely attainable with the right tools. The comparison chart below outlines some of the key differences of traditional vs Roth IRAs, including information about eligibility, contribution limits, tax implications and withdrawal guidelines.

Our team of Financial Advisors would love to connect with you as well to talk through your options and help you understand Traditional IRA and Roth IRA rules.

IRA Comparison Chart

	Traditional IRA	Roth IRA
Who's Eligible	Anyone of any age with earned income No income ceiling is imposed	Anyone of any age with earned income that does not exceed the annual IRS income ceiling
Contribution Limit	Your annual contribution limits are set by the IRS, are subject to change, and include a catch up amount for those age 50 and above	Your annual contribution limits are set by the IRS, are subject to change, and include a catch up amount for those age 50 and above
Tax-Deductible Contributions	Fully deductible if not covered by an employer-sponsored plan Partially deductible if covered by an employer-sponsored plan and income is within certain limits	Not deductible for anyone
Tax-Advantaged Growth	Tax-deferred growth - No federal taxes due until normal distributions are taken	Tax-free growth - No federal taxes due when money is taken out, if account is open for five years, and you are at least 59 1/2 years old
Withdrawals prior to age 59 1/2	Subject to a 10% IRS penalty tax and taxed as ordinary income Some exceptions apply.	"Growth" portions of withdrawals may be subject to a 10% penalty tax and taxed as ordinary income Some exceptions apply.