Traditional IRA

Roth IRA

Traditional retirement savings account.
Can be used to rollover your 401(k) from a previous employer.

Mostly used for retirement savings, but can also be used for qualifying first home purchase, education and medical expenses.

Contributions

Contributions are tax deductible depending on your income, marital status, and whether you have a retirement plan at work.

Contributions are not tax deductible.

Withdrawals

Taxes are deferred on earnings. Withdrawals can be made IRS penalty-free at age 59-1/2 and are taxed as ordinary income. Additional benefit comes from possibly being in a lower tax bracket at retirement age.

The original contributions can be withdrawn at any time. Withdrawals of earnings are tax-free if the account has been open for at least 5 years plus one of the following:

1. Age 59-1/2
2. Qualifying first home purchase
3. Disability
4. Death

You may also make IRS penalty free withdrawals for other qualifying expenses.

IRA Rates
Annual Contribution Limits