IRA Types
IRA Types
| Feature | Traditional IRA | Roth IRA | Education IRA |
|---|---|---|---|
| Modified Adjusted Gross Income Eligibility Restrictions | Eligibility Restrictions: Anyone with earned income may contribute. | Individuals earning $153,000 or less (2023) $161,000 or less (2024). Married couples earning $228,000 or less (2023) $240,000 or less (2024). Partial contribution limits in effect for income ranges: $146,000 - $161,000 (single) $230,000 - $240,000 (married) | Individuals earning
$110,000 or less.
Married couples earning $220,000 or less. Partial contribution limits in effect for income ranges: $95,001 -$110,000 (single) $190,001 -$220,000 (married) |
| Maximum Annual Contribution Does not imply that $6,000 can be contributed to both IRA types. A maximum $6,000 can be contributed to one or the other or split between both. | $7,000 Additional $1,000 if you are 50 years of age or older. May not exceed taxable compensation for the year. | $7,000 Additional $1,000 if you are 50 years of age or older. May not exceed taxable compensation for the year. | $2,000 per child, under age 18 (combined maximum for all contributors) |
| Non-wage Earning Spousal Contribution | $7,000 Additional $1,000 if 50 or over. | $7,000 Additional $1,000 if 50 or over. | N/A |
| Tax Deductibility of Contributions1 | Depends upon adjusted gross income, tax filing status and participation in an employer-sponsored pension plan, such as a 401(k). | Contributions are never deductible. | Contributions are never deductible. |
| Tax Treatment of Earnings1 | Grow tax deferred until withdrawn. | Grow tax deferred and potentially tax free. | Grow tax deferred and potentially tax free. |
| Deadline to Contribute | Tax filing deadline, not including extensions. | Tax filing deadline, not including extensions. | Tax filing deadline, not including extensions. |
| Taxes Upon Withdrawal1 | Withdrawals of deductible contributions and earnings are taxed as ordinary income at the current tax bracket. | None. (For qualified distributions.) | None. (For qualified distributions.) |
| Withdrawal Restrictions1 | Withdrawals before age 59½ result in IRS penalties. Some exceptions for penalty free withdrawals include: first-time home purchase, college expenses, medical expenses, disability and death. | Tax-free after five years participation if distributed after age 59½, after owner's death, while owner is disabled or if used for first-time home purchases. | Tax-free if entire distribution is used for qualifying education expenses.
(Expenses for elementary, secondary and post-secondary education and computer technology equipment.)
Penalty free withdrawal exceptions: • Death • Disability • Certain scholarship payments |
| Age at Which Withdrawals Must Begin | 70½ if born before 7/1/49. 72 if born on or after 7/1/49 | No restrictions. | Distribution of remaining funds required at age 30, within 30 days after 30th birthday. |
1 Consult a tax professional for tax advice.