Difference between ROTH IRA and Traditional IRA

TRADITIONAL IRA VS ROTH IRA You are under 70 1/2. No limit. Age Limit for contribution No Limit. Single filers - less than $135,000. Joint filers - less than $199,000 to file jointly. Income Limit for contribution Yes. But your entire IRA contribution may not be tax deductible. Yes. Can I invest in both 401(k) and an IRA? Mandatory after age 70 1/2. No restrictions. Do I have to take distributions? Contributions are not tax deductible. But no taxes on principal or returns at the time of withdrawal. Contributions are generally tax deductible. You pay taxes only when you withdraw the money. What is the tax treatment? How much can I contribute? Same for both $5,500 if you are younger than 50. Age < 50 $5,500 $6,500 if you are older than 50. Age > 50 $6,500 This infographic is for informational and educational purposes only and does not constitute an offer to sell nor a solicitation of an offer to buy any security which may be referenced upon the site. What are the contribution deadlines? For the 2018 tax year, the deadline is April 15, 2019. Same for both Withdrawals: Taxes & Penalties After age 59 1/2 Taxed as regular income after age 59 1/2. Tax free after age 59 if the account is at least 5 years old. 1/2 Before age 59 1/2 Subject to taxes + 10% penalty fee. Usually have a 10% penalty + tax on gains barring certain exceptions.

To learn about 2019 retirement account contribution limit changes click here.


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