|
IRA |
Roth IRA |
| Intended for |
Working Individuals who want to save for retirement
Non-employed spouses who file a joint tax return |
Working Individuals who want to save for retirement
Non-employed spouses who file a joint tax return
Must have an adjusted gross income below $95,000 - $110,000 (single) or $150,000 -$160,000 (joint) |
| Features and Advantages |
Earnings accumulate tax deferred
Contributions may be tax deductible
Can be used in conjunction with a Roth IRA and an Education IRA
Must be under age 70½ |
Must be under age 70½
Contributions are not tax deductible
Can be used in conjunction with a Roth IRA and an Education IRA
Contributions can continue after investor attains 70½ |
| Establishment |
Tax-filing deadline not including extensions |
Tax-filing deadline not including extensions |
| Maximum Contributions |
$4,000 for 2007; $5,000 for 2008
$1,000 catch-up for individuals over 50 |
$4,000 for 2007; $5,000 for 2008
$1,000 catch-up for individuals over 50 |
| Mandatory Minimum Distributions |
Must begin by age 70 ½,
Taxed as ordinary income |
No Minimum distributions required at age 70½ |
| Distributions Before Age 59½ |
Subject to ordinary income taxes |
Tax-free after five calendar years |
| Distributions After Age 59½ |
10% penalty in addition to ordinary income taxes
Exceptions: death, disability, medical hardship |
10% penalty in addition to ordinary income taxes
Exceptions: death, disability, medical hardship |
| Loans |
None |
None |
