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Individual Retirement Account (IRA)

When it comes to retirement, it’s never too little or too late to save.

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Compare Traditional IRAs and Roth IRAs

Individual retirement accounts (IRAs) are investment accounts specifically set up to save for retirement by offering significant tax advantages. And it’s never too late, or too little, to start saving for your financial future. Compare below which IRA option may be right for you.

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Traditional IRA

Contributions are tax-deferred. If you expect your tax rate during retirement to be lower than it is today or if you want to reduce taxable income now, this option may be a better fit for you.

Account Summary

  • Contribute up to $6,000 of earned income per year, or $7,000 if you're 50 and over1
  • Contributions may be tax-deductible if you meet certain conditions1
  • Withdraw funds without penalty beginning at age 59½. Withdraw before 59½ at 10 percent penalty (plus possible bank fees), with certain exceptions1
  • Distributions must begin by April 1st of the year following the year you reach age 722
  • Traditional IRAs can generally be converted to Roth IRAs, although tax consequences may apply1
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Roth IRA

Contributions are made after you are taxed, so you won't pay taxes when making qualified distributions. If you expect to have a higher tax rate at retirement, this option may be a better fit for you.

Account Summary

  • Contribute up to $6,000 of earned income per year, or $7,000 if you're 50 and over1
  • Contributions are not tax-deductible1
  • Funds can be withdrawn without penalty once you reach the age of 59½, or before that subject to a 10 percent penalty unless exceptions apply1
  • No requirement to take a minimum distribution at age 722
  • Anyone with earned income is eligible
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1 Certain qualifications apply. Consult your tax advisor for more information.

2 Exceptions allowing for non-penalty early withdrawals include disability, qualifying medical expenses (under certain conditions), qualifying education expenses, unemployment (under certain conditions), qualifying first home purchase, and death.