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Traditional IRA
You must be under age 70-½ with earned compensation
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Roth IRA
You may contribute at any age as long as you have earned compensation subject to income limits:
- For single filers: Up to $107,000 (to qualify for a full contribution); $107,000-$122,000 (to be eligible for a partial contribution)
- For joint filers: Up to $169,000 (to qualify for a full contribution); $169,000-$179,000 (to be eligible for a partial contribution)
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| Traditional IRA
Tax-deferred growth
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Roth IRA
Federally tax-free growth
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| Traditional IRA
The maximum annual contribution
limits are as follows:
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After 2008, the limit will be adjusted for inflation in $500 increments.
In addition to these contribution limits, workers age 50 and older will be able to make increased annual contributions as follows:
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| 2010-11 and thereafter |
$1,000 |
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| Roth IRA
The maximum annual contribution
limits are as follows:
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After 2008, the limit will be adjusted for inflation in $500 increments.
In addition to these contribution limits, workers age 50 and older will be able to make increased annual contributions as follows:
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| 2010-11 and thereafter |
$1,000 |
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| Traditional IRA
Yes, subject to retirement plan participation status and Adjusted Gross Income (AGI) limits
Full deductibility of a 2006 contribution is available for active participants in a retirement plan whose 2004 AGI is $89,000 or less (joint) and $56,000 or less (single); partial deductibility for AGI up to $85,000 (joint) and $60,000 (single).
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Roth IRA
No
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| Traditional IRA
Any earnings and deductible contributions subject to tax upon withdrawal.
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Roth IRA
Earnings can be withdrawn federally tax free and penalty free if the five-year aging requirement and certain other conditions are met.
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Traditional IRA
Yes, if you are under age 59-½ and the withdrawal is not for the following reasons:
- Death of the account owner
- Part of a series of substantially equal periodic payments
- Health insurance premium payments for unemployed individuals
- Payments of medical expenses in excess of 7.5% of an individual's adjusted gross income
- Qualified First Time Homebuyer
- Higher Education Expenses
- IRS Levy
- Disability
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Roth IRA
For earnings, penalty applies if you are under 59-½ and the withdrawal does not qualify as:
- Qualified higher education expenses
- Qualified first home purchase (lifetime limit of $10,000)
- Certain major medical expenses
- Certain long-term unemployment expenses
- Disability
- Substantially equal periodic payments
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| Traditional IRA
Minimum required distributions must start at age 70-½
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Roth IRA
None
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