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Compare Individual Retirement Plans

Traditional IRARoth IRARollover IRA
DescriptionDefer taxes on earningsEarnings are tax-freeMove retirement funds from an employer-sponsored plan to an IRA
Are contributions deductible?Depends on your income and access to an employer-sponsored planNoYes, 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 taxNo, if you are making qualified withdrawalsYes
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 2012For tax year 2012, lesser of your earned income or $5,000 and $6,000 if age 50 or older in 2012You 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 incomeDepends on income; no age limitsAnyone with an eligible rollover distribution
Are withdrawals required?Yes, starting at age 70 1/2NoYes, starting at age 70 1/2
Non-FDIC-insured brokerage optionsBrokerage IRAsBrokerage IRAsBrokerage IRAs