Traditional IRA
- Make pre-tax or tax-deductible contributions (conditions apply)
- Income tax applies on all withdrawals
- 10% federal penalty tax applies to all withdrawals before age 59½
- Required minimum distributions apply starting at age 73 (Contact us for details)
- Best if you expect to be in the same or lower tax bracket when you retire
Roth IRA
- Make after-tax contributions
- No income tax applies to withdrawals
- No penalties on early withdrawal of contributions, but a 10% federal penalty tax applies to withdrawals of earnings before age 59½ (Early CD withdrawal fees may apply. Contact us for details)
- No required minimum distributions
- Best if you expect to be in a higher tax bracket when you retire