Traditional IRA vs. Roth IRA: Which is Right for You?

Contribution Limits

Traditional and Roth Combined Limit

2018: $5,500 total per year; $6,500 if you’re age 50 or older

2019: $6,000 total per year; $7,000 if you’re age 50 or older

Limits could be lower based on your earned income

Contribution Age Limits

Traditional 

No contributions allowed beginning the year you reach 70 ½

Roth

No age limit to open or contribute

Deductions

Traditional

2018: Single tax filers with modified AGIs of less than $73,000  (phase-out begins at $63,000); joint filers with modified AGIs of less than $121,000 (phase-out begins at $101,000)

2019: Single tax filers with modified AGIs of less than $74,000 (phase-out begins at $64,000); joint filers with modified AGIs of less than $123,000 (phase-out begins at $103,000)

If neither joint filer is an active participant in a 401(k) or other qualified employer-sponsored retirement plan, your contributions may be deductible. See IRS Contribution and Deduction Limits for more details.

Roth
Contributions are not tax deductible

Income Limits

Traditional 

Anyone under age 70½ with earned income can contribute

Roth

2018: Single tax filers with modified AGIs of less than $135,000 and joint filers with modified AGIs of less than $199,000, regardless of age

2019: Single tax filers with modified AGIs of less than $137,000 and joint filers with modified AGIs of less than $203,000, regardless of age

See IRS Contribution and Deduction Limits for more details

Distributions

Traditional 

• Contributions and earnings may be taxable at withdrawal
• Required Minimum Distribution must begin in the year you turn age 70 ½
• Withdrawals before age 59 ½ may be subject to 10% early penalty unless an exception applies
• See All About Required Minimum Distributions for more information 

Roth

• Contributions can be withdrawn tax-free at any time
• No Required Minimum Distributions during the Roth IRA owner's lifetime
• Earnings can be withdrawn tax and penalty-free if you have had a Roth IRA account for five years AND are:
  • age 59 ½, or
  • purchasing your first home purchase ($10,000 life time limit), or
  • disabled, or
  • it’s an inherited IRA

Early Withdrawal Penalty Exceptions

Traditional and Roth
If you take a distribution prior to age 59 ½, an early withdrawal penalty may not apply if one of these exceptions applies: you are disabled, buying or building a first home (up to $10,000), paying for qualified higher education expenses, covering certain medical expenses, paying medical insurance if unemployed, or if it’s from an inherited IRA.

For Roth IRAs, the early withdrawal penalty applies only to earnings as contributions are not taxable or subject to the penalty.  

See Avoiding Tax Penalties for more details.