You can choose a Traditional or Roth IRA based on your unique situation and savings goals.
- A Traditional IRA enables you to save money while earning interest that is tax-deferred until withdrawn. Contributions may be tax-deductible and distributions at retirement are taxed as income (except for those portions of the distribution corresponding to contributions that were not deducted).
- A Roth IRA gives you the ability to save money while earning interest that is tax-exempt when you make a qualified distribution. Although contributions are not tax-deductible, there is no age limit for making contributions to a Roth IRA*.
What are the differences between a Traditional IRA and a Roth IRA?*
| Traditional IRA | Roth IRA | |
|---|---|---|
| Contributions |
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| Withdrawals |
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| Required Distributions |
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Note: The IRS may assess a 10% early withdrawal penalty for distributions taken prior to age 59½.
Some exceptions are made if funds are used for a first-time home purchase, education, certain medical expenses, etc.
Refer to IRS Publication 590: Individual Retirement Arrangements for complete listing of exceptions.
* Please consult your tax professional for further information regarding tax-deductibility of Traditional IRA
contributions, tax-deferred/tax-exempt interest, limitations and tax consequences of withdrawals for college expenses
and first-time home purchases, and additional IRS rules governing both Traditional and Roth IRAs. Severe penalties may be
imposed for contributions and withdrawals not made in accordance with IRS rules.