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Compare Individual Retirement Plans

Traditional IRA Roth IRA Rollover IRA
Description Defer taxes on earnings Earnings are tax-free Move retirement funds from an employer-sponsored plan to an IRA
Are contributions deductible? Depends on your income and access to an employer-sponsored plan No Yes, however, contribution deductibility depends on your income and access to an employer-sponsored plan
Do I pay taxes on withdrawals? Yes, pretax contributions and earnings are subject to tax No, if you are making qualified withdrawals Yes
What is my maximum annual contribution? For tax year 2012, lesser of your earned income or $5,000 and $6,000 if age 50 or older in 2012 For tax year 2012, lesser of your earned income or $5,000 and $6,000 if age 50 or older in 2012 You can make contributions to a Rollover IRA. However, it is very important that you keep your Rollover IRA assets separate from your Traditional IRA assets.
Who can invest? Anyone younger than 70 with earned income or a spouse with earned income Depends on income; no age limits Anyone with an eligible rollover distribution
Are withdrawals required? Yes, starting at age 70 1/2 No Yes, starting at age 70 1/2
Non-FDIC-insured brokerage options Brokerage IRAs Brokerage IRAs Brokerage IRAs