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Roth IRA
Traditional IRA
Can I contribute?

You are eligible to contribute if you earn compensation (or file a joint tax return with a spouse who earns compensation) and your modified adjusted gross income (MAGI) is less than or within the defined limits.

You are eligible to contribute if you are under 70 1/2 and earn compensation (or file a joint return with a spouse who earns compensation).

Can I take an income tax deduction for my contribution?

No. Roth IRA contributions are not tax-deductible.

Whether your Traditional IRA contribution is deductible on your federal income tax return depends on your marital and tax-filing status, your MAGI, and whether you or your spouse actively participate in an employer-sponsored retirement plan. If neither you nor your spouse is an active participant, you are eligible to deduct your full contribution.

What are the MAGI* limits?
For current MAGI limits, visit the IRS website. For current MAGI limits, visit the IRS website.
How much can I contribute each year?

Depending on your MAGI, you may be able to contribute up to $5,500** for 2016 and for 2017, or if you are age 50 an older up to $6,500 for 2016 and for 2017. Regular contributions to both Traditional and Roth IRAs in aggregate cannot exceed these limits. For current contribution limits visit the IRS website.

Contributions cannot exceed your annual compensation.

You can contribute up to $5,500 for 2016 and for 2017, or if you are age 50 and older, up to $6,500 for 2016 and for 2017. For current contribution limits visit the IRS website.

Contributions cannot exceed your annual compensation.

What are the benefits?
  • You may qualify for a saver's tax credit up to $1,000 when you make a contribution
  • Because all Roth IRA contributions must be included in your taxable income, and therefore are not tax-deductible, you can withdraw your contributions at any time, tax and penalty free
  • Any earning generated within the IRA are tax-deferred (you do not pay tax on the earning until you withdraw them)
  • If you satisfy the qualified distribution*** requirements, you can withdraw the earnings tax free, which is the ultimate advantage of having a Roth IRA.
  • You are never required to take money out of your Roth IRA, no matter what your age.
  • You may qualify for a saver's tax credit up to $1,000 when you make a contribution
  • Any earnings generated within the IRA are tax-deferred (you do not pay tax on the earning until you withdraw them).
  • If your Traditional IRA contributions are tax-deductible and therefore tax-deferred, you do not pay taxes on them until you withdraw the money.
  • Any after-tax amounts (nondeductible contributions) within your IRA can be withdrawn tax and penalty free.
Will I ever be required to withdrawal money?

No, Roth IRA owners are never required to take distributions. After your death, however, your beneficiaries may be subject to required distributions.

Yes, Traditional IRA owners are required to take annual minimum distributions beginning for the year they turn age 70 1/2. Your beneficiaries also will be subject to required distributions.


NOTE: You may be subject to a 10% early distribution penalty tax on any taxable amount taken from either a Traditional or Roth IRA before you reach 59 1/2 unless you qualify for one of these penalty exceptions: disability, certain health insurance costs, certain medical expenses, higher education expenses, first-time homebuyer expenses, substantially equal periodic payments, IRS tax levy, qualified military reservist distributions or death (beneficiary distributions).


*MAGI is your adjusted gross income before certain deductions or adjustments to income are made. MAGI limits are subject to annual cost-of-living adjustments (COLAs).

**These  contribution limits are subject to annual COLAs.

 ***A Roth IRA qualified distribution occurs when money is withdrawn from your Roth IRA after you have owned a Roth IRA for at least five years, and you are age 59 1/2 or older, disabled, a first time homebuyer, or deceased.