Traditional vs. Roth IRA
Traditional IRA earnings are taxed at the time of withdrawal. However, whatever you contribute is deductible from that year's income tax.1 Roth IRA earnings are tax-free — though you still pay taxes on your annual income in full, regardless of yearly contribution levels.1
Consult a tax advisor to decide which IRA best suits your retirement savings!
- No minimum contribution in any year allowing flexibility
- Contributions MAY BE tax deductible on state and federal income tax1
- Earnings are tax deferred until withdrawal (when usually in lower tax bracket)
- Withdrawals can begin at age 59½
- Early withdrawals subject to penalty2
- Mandatory withdrawals at age 70½
- Contributions are NOT tax deductible
- Earnings are 100% tax free at withdrawal1
- Principal contributions can be withdrawn without penalty1
- Withdrawals on interest can begin at age 59½
- Early withdrawals on interest subject to penalty2
- No mandatory distribution age
- No 70½ age limit on making contributions as long as you have earned income1
1Subject to some minimal conditions. Consult a tax advisor.
2Certain exceptions apply, such as healthcare, purchasing first home, etc.