Traditional vs. Roth IRA

Unlike the “paper or plastic” question, picking your IRA might call for some guidance. Weigh the major differences below.

Traditional IRA

Strive to trim today’s income taxes while saving for retirement.

  • Contributions may be deductible on your annual income taxes
  • Only pay tax when you withdraw money with qualified withdrawals

You can contribute if:

  • You or your spouse received taxable income during the year, and
  • You won't reach age 70½ by year-end

Roth IRA

Aim to save more on taxes over time and have more flexibility with withdrawals.

  • Contributions are not tax deductible
  • In retirement, withdrawals are tax-free

You can contribute if:

  • You or your spouse received taxable income during the year, and
  • You file taxes jointly, with an adjusted gross income below $188K, or
  • You file taxes individually, with an adjusted gross income below $127K

Depending on your income, contribution limits
may vary.