|
Eligibility Requirements |
| Traditional IRA |
Roth IRA |
|
You must be less than 70½ with earned compensation.
|
You may contribute at any age as long as you have earned compensation
subject to income limits:
 Single
Filers:
Less than $105,000 = full contribution
$105,000 - $120,000 = partial contribution
Married
Filers:
Less than $166,000 = full contribution
$166,000 - $176,000 = partial contribution
|
|
Key Tax Advantage |
| Traditional IRA |
Roth IRA |
|
|
| Federally Tax-free growth |
|
|
Maximum Annual
Contribution |
| Traditional IRA |
Roth IRA |
$5,000
$6,000 - Workers age 50 and older (as of year-end) will be able
to make an additional contribution of $1,000 each year.
|
$5,000
$6,000 - Workers age 50 and older (as of year-end) will be able
to make an additional contribution of $1,000 each year.
|
|
Tax Deductible
Contributions |
| Traditional IRA |
Roth IRA |
Yes - Subject to retirement plan participation status and Adjusted Gross
Income (AGI) limits:
Full deductibility of 2009 contribution
is
available for active
participants in a
retirement plan whose 2009 AGI is
$89,000 or less (jointly) and $55,000
or less (single).
Partial deductibility of 2009
contributions is available for active
participants in a retirement plan whose
2009 AGI is up to
$109,000 (jointly)
and up to $65,000 (single).
|
No
|
|
Tax Treatment of
Withdrawals |
| Traditional IRA |
Roth IRA |
|
Any earnings and deductible contributions subject to tax upon withdrawal.
Distributions of contributions and qualified distributions of earnings are
federally tax-free.
|
Contributions can be withdrawn at any time tax-free,
without penalty.
Distributions are exempt from state taxes in most states.
Assets grow federally tax-free - This means you'll never have to pay
federal income taxes on your earnings, provided certain requirements are
met.
|
|
10% Early Withdrawal
Penalty |
| Traditional IRA |
Roth IRA |
Yes, if you are younger than 59½ and the withdrawal is not for the
following reasons:
Death
or disability of the account
owner
Part
of a series of substantially equal
periodic payments
Health
insurance premium payments for
unemployed individuals
Payments
of medical expenses in
excess of 7.5% of an individual's AGI
Qualified
first time homebuyer
Higher
education expenses
IRS
levy
|
Same as Traditional, plus your IRA must meet five year aging
requirements.
|
|
Mandatory Distributions |
| Traditional IRA |
Roth IRA |
|
Minimum required distributions must start at age 70½.
|
No
|
