Traditional IRAs vs. Roth IRAs

IRA's | Eligibility | IRA Types | Traditional vs. Roth | Free Analysis

Traditional IRA

Eligibility - Income, under age 70 ½
Contribution - Maximum of $2,000
Deductibility - Full if employer does not offer plan
Tax Advantages of Contributions - Within certain income limits: Single - $41,000 Married - $61,000 Tax deferred, more real money working for investments.
Tax Penalties - 10% excise tax if money is taken prior to age 59 ½ , with certain exceptions.
Required Distributions - Must start by April 1st after age 70 ½.

Roth IRA

Eligibility - Income Under - Single $110,000, Married $160,000
Contribution - Max. - $2,000
Deductibility - Not Deductible
Tax Advantages of Contributions - No tax on principle or interest when the money is withdrawn.
Tax Penalties - 10% excise tax if money is taken prior to age 59 ½ and held less than 5 years, with certain exceptions.
Required Distributions - No required distributions.

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