IRA Comparison Chart

Traditional IRA Roth IRA
Eligibility
  • You must have earned income and be under age 70 ½ in the year the contribution is made.
  • A non-working spouse is also eligible to contribute up to $5,500 in 2018.
  • No age limit, you must have a modified adjusted gross income (AGI) below $120,000 if single or $189,000 if married and filing jointly.
  • The maximum contribution limit is phased out for those individuals with AGI between $120,000 and $135,000 (single) and $189,000 and $199,000 (joint).
  • A non-working spouse is also eligible to contribute up to $5,500 in 2018.
Maximum contribution
2018: $5,500 annually 2018: $5,500 annually
Catch up contribution
If you are age 50 or older in the year of the contribution, eligible IRA holders can make an additional contribution of $1,000. If you are age 50 or older in the year of the contribution, eligible IRA holders can make an additional contribution of $1,000.
Tax-deferred growth
  • Investment growth is tax-deferred.
  • Contributions are possibly tax deductible.
  • Taxes are not paid on deductible contributions and all earnings until money is withdrawn.
Investment growth is tax-deferred and earnings can be withdrawn tax-free if the account has been open for at least five years and if certain requirements are met.
Contribution tax deductibility
  • If neither you nor your spouse is an active participant in an employer-sponsored plan, your entire contribution is tax deductible.
  • If you are an active participant in an employer-sponsored plan, and (subject to certain phaseout provisions) your AGI in 2018 does not exceed $63,000 (single) or $101,000 (joint).
Contributions are not tax deductible.
Required distribution
Distributions must begin by April 1 of the calendar year following the year you reach 70 ½ and continue each year by December 31. There is no required date for beginning distributions.
Taxable amounts withdrawn prior to age 59 ½ may be subject to an additional 10% penalty tax. Premature withdrawals may be subject to federal and state taxes plus a 10% federal tax penalty.
Qualified early withdrawals

Circumstances in which withdrawals can be made penalty free prior to age 59 ½ include:

  • IRA owner's death or disability
  • timely removal of excess contributions
  • substantially equal periodic payments made over life expectancy
  • purchase of health insurance while unemployed
  • the purchase of a first home (up to $10,000)
  • for certain higher educational expenses

Taxes apply to all earnings and all deductible contributions withdrawn.

Withdrawals are tax free if the account is open for at least five years and:

  • the withdrawals are made after attaining age 59½
  • your death or disability
  • to purchase a first time home (up to $10,000)

Distributions that are not qualified distributions are included in income to the extent attributable to earnings.

A 10% penalty tax will apply to the taxable portion of the non-qualified distribution unless an exception applies for individuals under the age of 59½.

Rollovers and transfers
  • When a Traditional IRA is converted to a Roth IRA, taxes must be paid on deductible contributions and all earnings.
  • Transfers to and from other Traditional IRAs are permitted.
  • When a Traditional IRA is converted to a Roth IRA, taxes must be paid on all pre-tax contributions and all earnings.
  • Transfers to and from other Roth IRAs are permitted.