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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 2012 Income Ceiling: $125,000 for single filers, $183,000 for joint filers

Tax Year 2013 Income Ceiling: $127,000 for single filers, $188,000 for joint filers
Contribution Limit Individual: $5,000 or 100% of earned income, whichever is less – for tax year 2012 – or $5,500 for tax year 2013

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

Married Couple: $10,000 totally for tax year 2012; $5,000 for IRA of working spouse and $5,000 for IRA of non-working spouse. $11,000 for tax year 2013; $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: $5,000 or 100% of earned income, whichever is less – for tax year 2012 - or $5,500 for tax year 2013

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

Married Couple: $10,000 totally for tax year 2012; $5,000 for IRA of working spouse and $5,000 for IRA of non-working spouse. $11,000 for tax year 2013; $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 $110,000 (single filers) & $173,000 (joint filers) for tax year 2012. For tax year 2013, phase-out begins at $112,000 (single filers) and $178,000 (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

Securities, insurance products and advisory services are offered through Essex National Securities LLC, member FINRA/SIPC and an SEC registered investment advisor, which is not affiliated with this financial institution.