Traditional vs. Roth IRA

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Traditional and Roth IRAs are both great investment tools. Compare the features of each below.

 
Traditional IRA
Roth IRA
Tax Advantages*Tax-deferred growth potential.
You generally pay taxes when you make withdrawals, at which time you may be in a lower tax bracket.

Your Traditional IRA contributions may be tax-deductible if you or your spouse does not participate in an employer-sponsored plan.
Tax-free growth potential.
You pay no taxes when you make qualified withdrawals after age 59½ and your account has been open at least five years.
Eligibility AgeYou must be under age 70½ and have earned income in order to make Traditional IRA contributions.No age restrictions, but you must have earned income in order to make Roth IRA contributions.
Maximum IncomeNo restrictions on eligibility to contribute, but possibly on deductibility.Not eligible if your MAGI is over $129,000 for single filers and $191,000 for joint filers for 2014. 2015 limits are $131,000 for single filers and $193,000 for joint filers.
Minimum IncomeEarned income must be equal to or greater than your annual Traditional IRA contributions.Earned income must be equal to or greater than your annual Roth IRA contributions.
Maximum Contributions$5,500/ $5,500 ($6,500/ $6,500 if you are 50 or older)$5,500/ $5,500 ($6,500 / $6,500 if you are 50 or older)

*Always consult with your tax professional on any potential tax advantages an IRA might make to your taxes.