Contributions to a Traditional IRA may be tax-deductible, up to 100%, but distributions are generally taxable.
Earnings grow tax deferred.
Distributions are required to be taken by Traditional IRA holders beginning at age 70 ½.
Distributions are generally taxable, but are penalty-free if withdrawn under one of the following circumstances:
Attaining age 59 ½;
Incurring a disability;
Payment for certain health insurance, medical expenses, and higher education expenses;
Payment for first-time homebuyer expenses;
Death (payments to beneficiaries); or
Being a qualified military reservist.
Roth IRAs*
Contributions to a Roth IRA are not deductible.
Earnings can grow tax free.
Contributions can generally be distributed tax free at any time.
Distributions are not required by Roth IRA holders, though beneficiaries may be subject to required distributions.
Earnings can be distributed tax free if the Roth IRA holder first made a Roth IRA contributions at least five years ago, and one of the following events occurs:
