Traditional IRA/Roth IRA
Deciding whether to open a Roth IRA or Traditional IRA is a major decision with potentially large financial consequences. Both forms of the IRA are great ways to save for retirement, although each offers different advantages.
Traditional IRA Profile
- Tax deductible contributions (depending on income level)
- Withdraws begin at age 59 1/2 and are mandatory by 70 1/2.
- Taxes are paid on earnings when withdrawn from the IRA
- Funds can be used to purchase a variety of investments (stocks, bonds, certificates of deposits, etc.)
- Available to everyone; no income restrictions
- All funds withdrawn (including principal contributions) before 59 1/2 are subject to a 10% penalty (subject to exception).
Roth IRA Profile
- Contributions are not tax deductible
- No Mandatory Distribution Age
- All earnings and principal are 100% tax free if rules and regulations are followed
- Funds can be used to purchase a variety of investments (stocks, bonds, certificates of deposits, etc.)
- Available only to single-filers making up to $95,000 or married couples making a combined maximum of $150,000 annually.
- Principal contributions can be withdrawn any time without penalty (subject to some minimal conditions).
For a comparison of IRA Accounts and Contribution Limits - 
Comparison Chart
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