There are advantages to both traditional and Roth IRAs. A traditional IRA provides potential tax relief today, while a Roth IRA has the potential for the most tax benefit at time of retirement.
- No minimum contribution requirement
- Contributions are 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
- Income limits to be eligible to open Roth IRA3
- Contributions are NOT tax deductible
- Features federal income tax-free withdrawals of earnings for certain distribution reasons after a five-year holding period
- Principal contributions can be withdrawn without penalty1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 age limit on making contributions as long as you have earned income
1Subject to certain conditions. Consult a tax advisor.
2Certain exceptions apply, such as healthcare, purchasing first home, etc. Consult a tax advisor.
3Consult a tax advisor.