
IRAs
There are various types of individual retirement accounts (IRAs), including traditional, and Roth IRAs.Traditional IRAs
A traditional IRA is a special tax-deferred savings account authorized by Internal Revenue Code section 408. It is a unique and simple way to encourage people to save money for retirement.Roth IRAs
Contributions to a Roth IRA are made with after-tax dollars but grow tax free.- Single $135,000 (phase-out begins at $120,000)
- Married filing jointly $199,000 (phase-out begins at $189,000)
For 2019, the annual limit for contributions is $6,000 (or $7,000, under catchup provision) and may be reduced if your modified adjusted gross income exceeds:
- Single $137,000 (phase-out begins at $122,000)
- Married filing jointly $203,000 (phase-out begins at $193,000)
The Roth IRA offers tax deferral on any earnings in the account. Withdrawals from the account may be tax free, if they are considered qualified. Limitations and restrictions may apply. Withdrawals prior to age 59½ or prior to the account being opened for 5 years, whichever is later, may result in a 10% IRS penalty tax. Future tax laws can change at any time and may impact the benefits of Roth IRAs. Their tax treatment may change.
Learn more about strategies to attain your financial goals, such as Retirement Solutions, Changing Jobs (Rollovers), Retiring (Rollovers and Immediate Annuities), College Savings, 529 Plans, Guidance Planning, and Estate Tax Planning.
IRAs Comparison Grid
Regular contributions to IRAs can be a great way to help pursue your retirement goals. Our IRA Comparison Grid lets you compare IRA options side by side.X
Empty Table Header | PERSONAL | RETIREMENT ACCOUNTS |
---|---|---|
Traditional IRA | Roth IRA | |
Description | Contributions may be tax deductible if you are considered eligible. Regardless, you can still make after-tax contributions and earnings continue to grow tax-deferred. | As a small business owner with no employees, you may be able to contribute more than with other types of retirement plans. |
Eligibility to Contribute | As long as you have earned income contributions can be made up to the year you turn 70 ½. | Contributions can be made at any age as long as you have earned income. Individuals with certain modified adjusted gross income levels may not be able to contribute. No maximum age restrictions. |
Earnings and Withdrawal Taxation | When withdrawn your tax-deductible contributions and earnings are taxed as ordinary income. After-tax contributions are withdrawn tax-free. | If the account has been held for 5 years after tax contributions and earnings are income tax-free if withdrawn under qualified reasons. |
Tax Deductible Contributions | Yes, if you meet the eligibility requirements. | No, contributions are made in after-tax dollars. |
Premature Withdrawal Penalties | 10% IRS early withdrawal penalty if withdrawn before age 59 ½ unless an IRS exception applies. | No penalties for withdrawals of contributions. Unless an IRS exception applies a 10% IRS early withdrawal penalty will be accessed if earnings are withdrawn before age 59 ½. |
Maximum Annual Contribution | 2018 tax year $5,500 ($6,500 if age 50+) 2019 tax year $6,000 ($7,000 if age $50+) | 2018 tax year $5,500 ($6,500 if age 50+) 2019 tax year $6,000 ($7,000 if age $50+) |
Required Withdrawals | Must begin at age 70 ½. | Owners Death. |
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