| |
Traditional
IRA |
Roth
IRA |
Who
is Eligible
|
Individuals
under age 70 1/2 who have earned income, regardless of amount
|
Individuals
of any age with Modified Adjusted Gross Income under a certain level
|
Tax
Status of Earnings
|
Earnings
are taxed as regular income according to your income tax bracket at
time of withdrawal
|
No taxes paid
on earnings provided account has been established for at least five
years and at least one of the following applies:
- First home
purchases ($10,000 lifetime limit)
- Death/disability
• Age 59 1/2 or older
|
Yearly
Maximum Allowable Contributions
|
$2,000 or 100%
of compensation, whichever is less (single) $4,000 or 100%
of combined compensation, whichever is less (joint) but no more
than $2,000 to each IRA
|
Same
as Traditional IRA
|
Tax
Deductibility of Contributions
|
If not covered
by an employer-sponsored plan, fully deductible if certain income
criteria are met If covered
by an an employer-sponsored plan, fully deductible if certain income
criteria are met If covered
by an an employer-sponsored plan, partially deductible if certain
income criteria are met
|
Contributions
are not tax deductible
|
Mandatory
Distribution Status
|
Distributions
must start by 70 1/2
|
No
mandatory distribution requirement
|
Modified
Adjusted Gross Income Limits
|
To
fully deduct the $2,000 maximum contribution: Not covered
by employer plan
- If covered
by employer plan, less than a certain amount of Modified Adjusted
Gross Income
To partially
deduct:
- Covered by
an employer plan but meet Modified Adjusted Gross Income criteria
|
To be eligible
to contribute the $2,000 maximum:
- Meet Modified
Adjusted Gross Income requirement
|
 Early
Withdrawal Options (before age 59 1/2)
|
10% early withdrawal
penalty waived for:
- Post-secondary
education expenses
- First home
purchases ($10,000 limit)
- Death/disability
- Certain medical
expenses/health insurance premiums during unemployment
- Certain substantially
equal annual periodic payments (Taxes are still paid upon withdrawal)
|
10% early withdrawal
penalty waived for:
- Post-secondary
education expenses
- First home
purchases ($10,000 limit)
- Death/disability
- Certain medical
expenses/health insurance premiums during unemployment
- Certain substantially
equal annual periodic payments
|
|
