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Traditional IRA vs Roth IRAs

Deciding between an IRA vs Roth IRA is important and completely attainable with the right tools. The 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 IRA and Roth IRA rules.

  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 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.