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Traditional IRA
You can deduct your maximum contribution on your tax return and defer paying taxes until you retire.
Withdrawals are permitted from age 59 1/2 up to age 70 1/2, and are taxed as ordinary income.
You may be eligible for the full tax-deductible contribution depending on your Adjusted Gross Income
(AGI) and if you are not a participant in an employer-sponsored retirement plan, are a single taxpayer
or married filing jointly, are a working or non-working spouse, or you are under age 70 1/2 with earned
income.
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Roth IRA
Your maximum contribution is not tax-deductible, but all future withdrawals are tax-free and
penalty-free if the account has been open for 5 years and you are 59 1/2 or older, or
if you are buying your first house (up to $10,000) or paying for a higher education.
If you exceed the AGI limits, you may not be eligible or the amount you can contribute will be reduced.
You can also convert all or part of a Traditional IRA to a Roth IRA if your combined income
is $100,000 or less in the year of the conversion. The amount you convert is taxed as ordinary
income. There are no conversion or penalty fees.
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Educational IRA
With an Educational IRA, money may be set aside for a childs education. The Educational IRA has the
advantages of tax deferred income. This allows your savings to grow faster.
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