Traditional vs. Roth IRA

Description Traditional IRA Roth IRA

Annual Contribution
  • Single - lesser of 100% of earned income or $5,500.
  • Married - $11,000 ($5,500 for each spouse).
  • Contributions may be tax-deductible if certain eligibility requirements are met.
  • IRA Catch-up contributions will be allowed for individuals who are age 50 or over before the end of each tax year. For the tax year 2016, the catch up amount is $1,000.
  • Single - lesser of 100% of earned income or $5,500.
  • Married - $11,000 ($5,500 for each spouse).
  • Contributions may be tax-deductible if certain eligibility requirements are met.
  • IRA Catch-up contributions will be allowed for individuals who are age 50 or over before the end of each tax year. For the tax year 2016, the catch up amount is $1,000.

Withdrawals
  • May be taxed as ordinary income.
  • Tax-free and IRS penalty-free; some restrictions apply.

Contribution Age Limit
  • No contributions after age 70 1/2.
  • No age limit.

Minimum distribution requirements
  • Begin the year the IRA Owner reaches age 70 1/2.
  • No required distributions prior to death.

Rollovers
  • May convert to a Roth IRA; some restrictions apply.
  • May roll over distributions from qualified retirement plans; some restrictions apply.
  • May roll over to another traditional IRA; some restrictions apply.
  • May roll over to another Roth IRA; some restrictions apply.
  • May roll over distributions from qualified retirement plans; some restrictions apply.
IRS penalty free withdrawals
  • Yes, penalty exceptions apply, including first-time home purchase and higher education.
  • Yes, penalty exceptions apply, including first-time home purchase and higher education.
Additional Highlights
  • Tax deduction based on income levels if covered by employer's retirement plan (or if spouse of plan participant).
  • Participation is based on income levels.