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Individual Retirement Account - ira
Individual Retirement Accounts
An IRA is a form of retirement plan that offers certain tax advantages.
The two most common accounts are traditional IRAs and Roth IRAs. Each offers different tax advantages and benefits, so it’s important to compare them.
Check with your qualified tax professional on which plan is right for you, then visit our Retirement Central website to open your plan online today!
Benefits of IRAs
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Tax-advantaged long-term savings vehicle
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Flexible options
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Both Traditional and Roth IRAs available
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Traditional IRA - taxes on earnings are deferred until funds are withdrawn
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Roth IRA - is funded with after-tax money and provides tax free earnings
Which Account is Right For You?
| Roth vs. Traditional | Roth IRA | Traditional IRA | ||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
| Not tax-deductible | Tax-deductible, subject to certain limitations | |||||||||||||||
| Tax-free, subject to certain limitations | Taxes are deferred until you begin withdrawing funds | |||||||||||||||
| Tax-free withdrawal of original contribution; potentially tax-free withdrawal of earnings if part of a qualified withdrawal | Taxable | |||||||||||||||
| 2024: Up to $7,000 for those under 50; $8,000 for those 50 & up | 2024: Up to $7,000 for those under 50; $8,000 for those 50 & up | |||||||||||||||
| No age restrictions, see the IRS's website for more information | No age restrictions, anyone with earned income may contribute up to age 70 1/2 | |||||||||||||||
| Contributions can be withdrawn anytime without taxes or penalties. Earnings can be withdrawn, without taxes of penalties, if you are 59 1/2 and your account has been open five years or more. | All earnings and deductible contributions are taxable upon withdrawal. Penalties will be assessed if withdrawals are taken before age 59 1/2, or if withdrawals are not taken by age 70 1/2 | |||||||||||||||
| None | Required minimum distributions upon reaching age 72 | |||||||||||||||
| Some exceptions are made if funds are used for a first-time home purchase, education, or certain medical expenses. | Some exceptions are made if funds are used for a first time home purchase, education, or certain medical expenses. | |||||||||||||||
| Roth vs. Traditional | Contributions | Earnings | Withdrawals | Maximum Contributions | Eligibility | Tax/Penalty Consequences | Distribution Requirements | Exceptions to Penalties | ||||||||
| Roth IRA | Not tax-deductible | Tax-free, subject to certain limitations | Tax-free withdrawal of original contribution; potentially tax-free withdrawal of earnings if part of a qualified withdrawal | 2024: Up to $7,000 for those under 50; $8,000 for those 50 & up | No age restrictions, see the IRS's website for more information | Contributions can be withdrawn anytime without taxes or penalties. Earnings can be withdrawn, without taxes of penalties, if you are 59 1/2 and your account has been open five years or more. | None | Some exceptions are made if funds are used for a first-time home purchase, education, or certain medical expenses. | ||||||||
| Traditional IRA | Tax-deductible, subject to certain limitations | Taxes are deferred until you begin withdrawing funds | Taxable | 2024: Up to $7,000 for those under 50; $8,000 for those 50 & up | No age restrictions, anyone with earned income may contribute up to age 70 1/2 | All earnings and deductible contributions are taxable upon withdrawal. Penalties will be assessed if withdrawals are taken before age 59 1/2, or if withdrawals are not taken by age 70 1/2 | Required minimum distributions upon reaching age 72 | Some exceptions are made if funds are used for a first time home purchase, education, or certain medical expenses. |
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