Whats the difference between a Traditional IRA and a Roth IRA?
A Traditional IRA is a tax-deferred retirement investment. With a Traditional IRA, annual contributions may be tax-deductible and earnings are not taxed until you withdraw the money. When you take distributions after age 59½ (or other qualifying reasons including disability and death), the taxable portion of your withdrawal is taxed at your current tax rate, which is typically less than during your prime earning years. No further contributions can be made past the age of 70½. A Roth IRA is a tax-exempt retirement investment. With a Roth IRA, your annual contributions are not tax-deductible. However, when you withdraw the money, all of it, including your earnings, is tax-free, once you have a Roth IRA for more than five years and you are over the age of 59½ (or other qualified withdrawal reasons). Contributions may continue past age 70½. We recommend that you consult your tax advisor to determine whether a Traditional or Roth IRA is best for your situation.
A Traditional IRA is a tax-deferred retirement investment. With a Traditional IRA, your annual contributions may be tax-deductible and your earnings are not taxed until you withdraw the money. When you take distributions after age 59½ (or other qualifying reasons including disability and death), the taxable portion of your withdrawal is taxed at your then current tax rate—typically a lower rate than during your prime earning years. You can’t make further contributions beginning the year you reach age 70½. A Roth IRA is a tax-exempt retirement investment. With a Roth IRA, your annual contributions are not tax-deductible. However, when you withdraw the money, all of it, including your earnings, is tax-free, as long as the Roth IRA has been opened for at least five tax years and you’re over 59½ (or you’re qualified for other distribution options). You can continue to make contributions even after age 70½, as long as you (or your spouse, if married filing jointly) have earned income. We re
A Traditional IRA is a tax-deferred retirement investment. With a Traditional IRA, your annual contributions may be tax-deductible and your earnings are not taxed until you withdraw the money. When you take distributions after age 59½ (or other qualifying reasons including disability and death), the taxable portion of your withdrawal is taxed at your then current tax rate—typically a lower rate than during your prime earning years. You can’t make further contributions once you’ve reached 70½. A Roth IRA is a tax-exempt retirement investment. With a Roth IRA, your annual contributions are not tax-deductible. However, when you withdraw the money, all of it, including your earnings, is tax-free, as long as the Roth IRA has been opened for at least five tax years and you’re over 59½ (or you’re qualified for other withdrawal options). You can continue to make contributions even after age 70½. We recommend that you consult your tax advisor to determine whether a Traditional or Roth IRA is be
Traditional IRA–The traditional IRA is an account that allows you to defer taxes on the earnings on your contributions until they are withdrawn. Also, certain contributions are tax deductible in the tax year for which they are made. Roth IRA–The Roth IRA allows only nondeductible contributions and features tax-free withdrawals for certain distribution reasons after a five-year holding period. Since Roth IRA contributions are nondeductible and taxed in the year they are earned, if you expect to be in a higher tax bracket when you retire, you may benefit more from a Roth IRA than from a traditional IRA.
