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Personal Banking

Roth vs. Traditional IRA

First Commonwealth offers access to both Traditional and Roth IRAs for our clients. In order to help you determine which IRA is best for you, we have created a comparison of the two products based on such factors as eligibility, contribution limits, tax implications and withdrawal guidelines. As always, we suggest you contact us before making any final decisions and let our service representatives further assist you.

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Traditional IRA Roth IRA
Who's Eligible Anyone under age 70 1/2 with earned income

No income ceiling is imposed

Anyone of any age with earned income

Tax Year 2015 Income Ceiling: $131,000 for single filers, $193,000 for joint filers

Tax Year 2016 Income Ceiling: $132,000 for single filers, $194,000 for joint filers
Contribution Limit Individual: $5,500 or 100% of earned income, whichever is less - for tax years 2015 and 2016

If age 50 and over, an additional $1,000 may be contributed or 100% of earned income, whichever is less.

Married Couple: $11,000 total for tax year 2015 or 2016; $5,500 for IRA of working spouse and $5,500 for IRA of non-working spouse. Additional catch up contributions for those age 50 and over, as noted above, also apply.
Individual: $5,500 or 100% of earned income, whichever is less - for tax years 2015 and 2016

If age 50 and over, an additional $1,000 may be contributed or 100% of earned income, whichever is less.

Married Couple: $11,000 total for tax year 2015 or 2016; $5,500 for IRA of working spouse and $5,500 for IRA of non-working spouse. Additional catch up contributions for those age 50 and over, as noted above, also apply.

Contribution eligibility begins to phase-out at $116,000 (single filers) & $183,000 (joint filers) for tax year 2015. For tax year 2016, phase-out begins at $117,000 (single filers) and $184,000 (joint filers).
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 include: death; disability; medical expenses over 7.5% of AGI; medical insurance premiums during period of unemployment
"Growth" portions of withdrawals may be subject to a 10% penalty tax and taxed as ordinary income

Some exceptions include: death; disability; medical expenses over 7.5% of AGI; medical insurance premiums during periods of unemployment

 

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Investment and insurance products and services are offered through INFINEX INVESTMENTS, INC. Member FINRA/SIPC.

Infinex and First Commonwealth Bank are not affiliated. Products and services made available through Infinex are not insured by the FDIC or any other agency of the United States and are not deposits or obligations of nor guaranteed or insured by any bank or bank affiliate. These products are subject to investment risk, including the possible loss of value.

Disclosure - NOT Guaranteed by the Bank. NOT FDIC Insured. NOT a Deposit. Not Insured by any Federal Government Agency. May Lose Value including Loss of Principal.
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