Compare IRAs

Which IRA is right for you?
Both alternatives are very attractive choices for retirement savings. But choosing the one that’s right for you can make a real difference in your retirement income.

	Traditional IRA	Roth IRA
Contributions	Tax-deductible 1	Non-deductible
Interest Earnings	Tax-deferred	Tax-free 2
Withdrawals at Retirement	Taxable 3	Tax-free
Maximum Adjusted Gross Income to establish account	No limit4	2007 - $114,000 ($166,000 if filing jointly) 2008 - $116,000 ($169,000 if filing jointly)
Annual Contribution Limits	$4,000 for 2007 $5,000 for 2008	$4,000 for 2007 $5,000 for 2008
IRS penalty-free withdrawals for any purpose starting at:	Age 59 1/2	Age 59 1/2 if established for 5 years 5
IRS penalty-free withdrawals at any time for qualifying education expenses	Yes	Yes
Mandatory withdrawals begin at:	Age 70 1/2 6	Never 7
Additional contributions permitted:	Until age 70 1/2	No age limit

1. May be tax-deductible based on Adjusted Gross Income (AGI). (for more details see Traditional IRA page)
2. As long as you are older than age 59 1/2 and your Roth IRA has existed for at least 5 years.
3. Distributions representing a return of non-deductible IRA contributions are non-taxable.
4. Income limits only apply if you or your spouse are participants in an employer-sponsored retirement plan.
5. Contributory basis may be withdrawn tax- and penalty-free anytime.
6. Mandatory withdrawals begin the year in which you turn 70 1/2.
7. Upon your death, your beneficiary may need to begin distributions.

The above is general information regarding IRAs, and does not take your unique, personal circumstances into account. It is not intended to be complete and should not be relied upon in making final decisions concerning IRA accounts. The information is not meant to constitute legal or tax advice. Please contact your tax professional for full details or visit the IRS website at www.irs.gov.