IRA Comparison Chart
| Type |
Eligibility
| Contribution Guide
| Deductibility
| Tax Advantages
| Withdrawal
|
Roth
|
AGI - Individuals earning up to
(check with IRS for current values)
but not over
(check with IRS for current values)
. MFJ - Earnings up to
(check with IRS for current values)
but not over
(check with IRS for current values)
. |
Individual - $5,000
MFJ - $10,000
Contributions may be made after age
70 1/2 if still employed. **** |
No |
Tax-free earnings. Penalty-free withdrawals after five years. |
Tax free*,*** for the purhase of a first home, higher education, after five years, after age 59 1/2. No required distribution at age 70 1/2. |
Education |
Named beneificiary less than 18 years old. AGI - Individual earnings up to
(check with IRS for current values)
but not over
(check with IRS for current values)
. MFJ - Earnings up to
(check with IRS for current values)
but not over
(check with IRS for current values)
. |
(check with IRS for current values)
per child per year |
No |
Tax-free for4 education expenses. K-12 and college. |
Must be depleted by age 30. Taxable and ten percent penalty when not used for education. *Special needs exception. |
Traditional Deductible
|
Individuals not participating in employer sponsored retirement pans. Active participants may also qualify for full or partial deductions. ** |
$5,000
or 100% of earned income whichever is less. Contributions not allowed after age 70 1/2.**** |
Yes |
Earnings grow tax deferred but are taxed upon withdrawal. Possible tax deduction. |
Penalty free*** after age 59 1/2, for the purchase of first home, higher education or upon death. Required distribution at age 70 1/2. |
* Withdrawals from a Roth IRA after five years are not subject to income tax or the 10 percent premature penalty if the individual is at least 59 1/2, dies, is disabled, or used up to $10,000 of the money for first-time purchase of a house. Withdrawals after five years, but before 59 1/2 for college expenses are not subject to a 10 percent penalty tax but are taxed at ordinary rates. Withdrawals of contributuions are not subject to income tax or a 10 percent early withdrawal penalty. Withdrawals of earnings before five years are subject to income tax and possibly the 10 percent penalty tax.
** If covered by a retirement plan, fully deductible contributions may be possible if AGI is below
(check with IRS for current values)
for single taxpayers and
(check with IRS for current values)
married filing jointly. In addition, reduced deductible contributions may be allowed for AGI levels between
(check with IRS for current values)
single and
(check with IRS for current values)
married filing jointly.
*** Taxable distributions are not subject to the 10 percent early withdrawal penalty if the individual is 59 1/2, deceased, disabled, taking equal periodic payments over his/her life expectancy for at least five years or until age 59 1/2, whichever comes later, or for college expenses, first-time home purchase up to $10,000, certain medical expenses and certain other uses.
**** An additional $500 catch up contribution can be made into a Roth or Traditional IRA starting the year you turn 50.
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