Investment Center
IRA Comparison Chart
| IRA | Traditional | ROTH |
| Qualifications | Must have earned income. Must not be 70 ½ by the year end. | Individual must have earned income. May be any age. |
| Income Limitations | No limits for individuals not actively participating in employer retirement plans. If active participant in employer retirement plan, subject to phase-out rules: Deductibility of Traditional IRA Contributions |
Regardless of coverage by employer retirement plan, subject to phase-out rules: MFJ: $169,000 - $179,000 Single: $107,000 - $122,000 MFS: $0 - $10,000 |
| Contributions Limits | IRA Contribution Limits chart | IRA Contribution Limits chart |
| Allowable deduction | Full deduction if individual is not an active participant in an employer maintained retirement plan. Phase-out rules apply if an active participant. Deductibility of Traditional IRA Contributions | No deduction allowed. |
| Penalties | 10% penalty is applied to all distributions that are taken before age 59 ½. A 6% penalty is applied to all excess contributions. | 10% penalty is applied to all distributions that are taken before age 59 ½. A 6% penalty is applied to all excess contributions. |
| Rollovers and conversions | IRA funds may be rolled into another IRA. (Rollovers must be completed within 60 days to avoid tax implications) IRA funds may also be converted into Roth IRAs penalty free: Conversions are subject to income tax. Consult you tax advisor for more info. Only taxpayers with AGI less than $100,000 are eligible. |
Funds from one Roth IRA may be rolled over tax free into another Roth IRA. |
| Required Distributions | Must begin April 1, following the year the participant turns age 70 ½. How much do you need to take out for RMD chart? | Distributions may be required only after death of the participant. – See tax consultant for details. |
| Tax Treatment on Distributions | All distributions are taxable at participant’s tax bracket. | Qualified distributions are nontaxable (including earnings). Certain nonqualified distributions are not subject to the 10% penalty, but the earnings portion is taxable (Consult your tax advisor for more info.). |
