Compare Traditional and Roth IRAs
Explore the contribution limits, withdrawal guidelines and more for these retirement accounts.
|What's the maximum contribution?1||$5,500, or $6,500 if age 50 or older||$5,500, or $6,500 if age 50 or older|
|Who is eligible to contribute?2||Individuals whose earned income equals or exceeds the amount of contributions
||Individuals who have a modified adjusted gross income (MAGI) of $133,000 or lower; married couples who have a combined MAGI of $196,000 or lower
|What's the maximum age I can contribute to an IRA?||70½||Any age|
|When is the contribution deadline?||April 18, 2017, for the 2016 tax year||April 18, 2017, for the 2016 tax year|
|What are the federal
income tax benefits?
|In general, contributions are deductible and earnings grow tax-deferred.||In general, earnings grow tax-free (although contributions are not deductible).|
|Are there exceptions to
the tax benefits?
|If you or your spouse is covered by a retirement plan at work, your tax deductibility might be limited if your income reaches certain levels. Check with the IRS to determine the limitations.||In general, no, assuming you meet all eligibility requirements.|
|When can I withdraw funds
|Age 59½. In general, withdrawals are subject to income tax.||If you're under age 59½, withdrawals of earnings are subject to income tax and penalty. If you're at least age 59½, you will have to pay taxes on earnings if it has been less than 5 years since you initially set up and contributed to your account.
|Are there required
|Yes, starting at age 70½||No|
|Learn more about Traditional IRAs||Learn more about Roth IRAs|
1 You cannot contribute more than your earned income in a year. So if your earned income was $4,000, your combined IRA contributions cannot exceed $4,000.
2 Assuming you meet eligibility requirements, you can contribute to both a Roth and a Traditional IRA. The maximum contribution to both cannot exceed a combined $5,500, or $6,500 if you're at least age 50.