Roth IRA Comparison

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 age 50 before the end of the tax year
Is there an age limit to make a contribution?	No	Cannot make contributions past age 70 ½
*Are there income limits on the ability to make nondeductible* contributions?**	Yes - the ability to contribute phases out between $122,000 and $137,000 Modified Adjusted Gross Income (MAGI) for single filers and between $193,000 and $203,000 MAGI for joint filer	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 turn age 70½ and by December 31 of later years
How are withdrawals taxed after age 59½?*	Withdrawals are tax free if account held five years Contributions are withdrawn tax free at any time	Withdrawals are subject to tax except for pro rata share of nondeductible contributions
How are withdrawals taxed before age 59½?*	Contributions are withdrawn tax free Withdrawals may be subject to an additional 10% tax unless you qualify for an exception	Withdrawals are subject to tax and a 10% penalty unless you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.

Disclosures:

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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