Compare Individual Retirement Accounts (IRAs)

IRAs offer significant benefits when saving money for your retirement. There are two types of IRAs, Traditional and Roth. The key difference between them is deciding when you want the tax benefit: when you contribute or when you withdraw money.

	Traditional IRA	Roth IRA
Age Requirements	An account can be opened at any age with earned income.
Income Limits	There are no income limits to make contributions. They are not phased out based on income limits. However, your ability to claim a deduction on your federal income tax return may be affected.	Modified Adjusted Gross Income (MAGI) may affect the amount that may be contributed. Or, if it is high enough, no contribution may be allowed.
Maximum Contribution Amount	For tax years 2024 and 2025, the most you may contribute to your Traditional or Roth IRAs is the lesser of $7,000 ($8,000 if age 50 or older) or 100% of earned income for the year. The maximum contribution amount may change each tax year.
Spousal IRA Contributions	A working spouse can contribute to a non-working spouse’s retirement savings. The participant and spouse must be married and file a joint federal tax return. The spouse must have an earned income of at least the amount the participant contributes to the IRA. The participant and their spouse may each contribute the maximum allowable contribution. Contributions also subject to limitations if one or both are covered by a qualified employer plan.
Deductibility of Contributions	Whether contributions are deductible is based on the participant's Modified Adjusted Gross Income and filing status.	Contributions are never tax deductible.
Contribution Deadline	Generally, deadlines are no later than April 15 following each tax year.
Tax Benefits	Offers tax-deferred growth and contributions may be tax deductible.	Offers tax-free growth and tax-free qualified withdrawals.
Taxation when Distributed	Distributions of any un-taxed monies are taxable when withdrawn.	Contributions may be withdrawn penalty-free. All withdrawals are federal income tax-free once you turn 59 ½ and have satisfied the five-year holding rule.
Penalties at Withdrawal	Withdrawals before age 59 ½ may be subject to a 10% federal tax penalty unless an exception applies. See below.	Unless an exception applies, a non-qualified distribution is subject to taxation and the 10% federal tax penalty. See below.
Penalty-Free Withdrawals	Exceptions include, but are not limited to, withdrawals for qualified birth and adoption expenses, survivors of domestic abuse, terminal illness, loss due to federally declared disasters, qualified higher education expenses, qualified first home purchase (lifetime limit of $10,000), qualified major medical expenses, or qualified reservist leave. Also includes withdrawals that follow the "substantially equal payment" provision of IRC 72(t).
Required Minimum Distributions (RMD)	Unless already taken, RMDs would start at age 73.	During the original owner’s lifetime, RMDs are not required. Beneficiaries are required to take an RMD.