|
|
Traditional IRA |
Roth IRA |
| Eligibility | Under age 70 1/2 Earned Income |
Earned Income
- Subject to
MAGI Limits |
| Contributions Limits |
Lesser of
100% of earned income or $5,000 Aggregated with Roth IRA contribution If age 50 or older an additional $1,000 is permitted for a total of $6,000 |
Lesser of
100% of earned income or $5,000 - Subject to MAGI limits Aggregated with traditional IRA contribution If age 50 or older an additional $1,000 is permitted for a total of $6,000 |
| Deductible Contributions |
YES - Subject to MAGI Limits | NO |
| Single
Filers: MAGI Limits for 2008 |
$53,000 or less = full deduction $53,000 to $63,000 = partial deduction $63,000 or more = no deduction |
$101,000 or less = full contribution $101,000 to $116,000 = partial contribution $116,000 or more = no contribution |
| Married / Joint
Filers: MAGI Limits for 2008 |
$85,000 or less = full deduction $85,000 to $105,000 = partial deduction $105,000 or more = no deduction |
$159,000 or less = full contribution $159,000 to $169,000 = partial contribution $169,000 or more = no contribution |
| Married /
Separate Filers: MAGI Limits for 2008 |
N/A = full deduction less than $10,000 = partial deduction $10,000 or more = no deduction |
N/A = full contribution less than $10,000 = partial contribution $10,000 or more = no contribution |
| Tax-Deferred Earnings |
YES | YES |
| Tax-Free Qualified Distributions |
None | Age 59
1/2 Death Disability First-time home buyers* *Must meet 5-year holding period |
| Taxable Distributions With No 10% Penalty |
Age 59
1/2 Death Disability Substantially equal periodic payments Qualified medical expenses (exceeding 7.5 AGI) Qualified medical insurance premiums by certain unemployed individuals Higher education First-time home buyers |
Substantially
equal periodic payments Eligible medical expenses (exceeding 7.5% AGI) Eligible medical insurance premiums by certain unemployed individuals When taken within the first five years; age 59 1/2; disability; death; and first-time home buyers distributions |
| Taxation Issues On Withdrawals |
Earnings
and deductible contributions are taxable Nondeductible contributions are not taxed Withdrawals are a ratio of deductible and nondeductible amounts |
Earnings
withdrawn for nonqualified reasons are taxable Contributions are not taxed when withdrawn Withdrawals are considered to be the return of contributions first, then earnings |
| Age 70 1/2 Required Minimum Distributions |
YES | NO |
Comparison
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