| Traditional IRA | Roth IRA | |
|---|---|---|
| Eligibility Requirements | Anyone age 70½ or less with earned compensation. Also available to at-home spouses. |
Contribute at any age as long as you have earned compensation and meet income limits. Also available to at-home spouses. |
| Main income tax benefit | Tax deferred growth | Tax free growth |
| Maximum annual contribution | $3,000, $3,500 if you're 50+ * | $3,000, $3,500 if you're 50+ * |
| Tax deductible contributions | Yes, subject to retirement plan participation status and adjusted gross income limits. |
No |
| Income tax treatment of withdrawals | Earnings and deductible contributions taxable as ordinary income upon withdrawal |
Distribution of contributions are federally tax free, distributions of earnings are tax free if held 5 years and you're 59½. |
| 10% Early withdrawal penalty | Yes, if you are under 59½ and withdrawals are not:
|
Same as traditional |
| Mandatory distribution | Required minimum distribution must begin at age 70½ |
No requirement ** |
| Contribution deadlines | IRA contributions for a tax year can be made anytime before that year's tax filing date. |
Same as traditional |
* This amount or 100% of your earned income, whichever is less.
** After death of Roth IRA owner, required minimum distribution will apply to beneficiary.
| Annuities Compound Interest |
IRA Basic's Long Term Care |
Traditional IRA Health Insurance |
Roth IRA Life Insurance |
IRA Comparisons Rule of 72 |
| Gary Jones Insurance Agency | CA License #0E22842 |
| 508 Main Street | 310-615-0940 Phone |
| El Segundo, CA 90245 | 310-615-0994 Fax |