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Compare Roth IRA and Traditional IRA

Commerce Financial Advisors

Comparison of Roth IRA and Traditional IRA

  Roth IRA Traditional IRA
Is there an annual contribution limit?
  • Yes, up to $6,000 per person to all IRAs combined per year1
  •  Additional $1,000 for individuals who attain age 50 before the end of the tax year
  • Yes, up to $6,000 per person to all IRAs combined per year1
  • Additional $1,000 for individuals who attain 50 years of age before the end of the tax year
Is there an age limit to make a contribution?
  • No
  • No. But prior to January 1, 2020, you were unable to contribute if you were age 70½ or older.
Are there income limits on the ability to make nondeductible contributions?
  • Yes. In 2021 – the ability to contribute phases out between $125,000 and $140,000 Modified Adjusted Gross Income (MAGI) for single filers and between $198,000 and $208,000 MAGI for joint filers
  • No
Are contributions deductible?
  • No, all contributions are nondeductible, after-tax contributions
  • Your deduction is allowed in full if you (and your spouse, if you are married) are not covered by a retirement plan at work.
  • Your deduction may be limited if you (or your spouse, if you are married) are covered by a retirement plan at work and your income exceeds certain levels.
Are there minimum distribution requirements?
  • Not if you are the original owner
  • Distribution must begin by April 1 following the year in which you attain 72 years of age and by December 31 of later years
How are withdrawals taxed after age 59½?*
  • Withdrawals are tax free if account is held for 5 years
  • Contributions are withdrawn tax free at any time
  • Withdrawals are subject to tax except for pro-rata share of nondeductible contributions
How are withdrawals taxed before age 59½?*

Contributions are withdrawn tax free

  • Withdrawals may be subject to an additional 10% tax unless you qualify for an exception


  • Withdrawals are subject to an a 10% penalty unless you qualify for an exception
Can I convert my IRA?
  • An account set up as a Roth IRA cannot be converted to a traditional IRA
  • A conversion to a Roth IRA results in taxation of any untaxed amounts in the traditional IRA


1. Effective Jan 1, 2019 individual annual contribution limit is raised from $5,500 to $6,000.

* Consult your tax advisor for advice.

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May lose value

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Security and Advisory services provided through Commerce Brokerage Services, Inc., member FINRA, SIPC, and a registered investment advisor. Insurance products are offered through Commerce Insurance Services, Inc. Both entities are subsidiaries of Commerce Bank.

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