3 IRA Types to Choose From - Traditional, Roth and Education

Current IRA Rates 


Traditional IRA


What are the age restrictions for contributions?

Owner must be under age 70 ½

What are the income limits for contributions?

There are no limits for contributions

What is the contribution limit?

$5,000 per year (minus Roth IRA contributions)

What is the deadline for contributions?

Tax return deadline for the year

When can earnings be withdrawn tax free?

N/A

When does the 10% early distribution tax penalty apply?

Before age 59 ½, unless deceased, disabled, taking pre 59 ½ periodic payments, paying qualified medical expenses, health insurance premiums for unemployed, first-home purchase, or educational expenses. Paying this tax at the time of distribution is optional

When must distributions begin?

age 70 ½

Roth IRA


What are the age restrictions for contributions?

NONE

What are the income limits for 2010 contributions?

Single filers: up to $105,000
Married couples filing jointly: up to $167,000

What is the contribution limit for 2010?

$5,000 per year (subtracting any Traditional IRA contributions)

What is the deadline for contributions?

Tax return deadline for the year

When can earnings be withdrawn tax free?

If both 5 year and qualified-reason tests are met

When does the 10% early distribution tax penalty apply?

Before age 59 ½, unless deceased, disabled, taking pre 59 ½ periodic payments, paying qualified medical expenses, health insurance premiums for unemployed, first-home purchase, or educational expenses. Paying this tax at the time of distribution is optional.

When must distributions begin?

At owner's death

Education IRA


What are the age restrictions for contributions?

Designated beneficiary must be under 18

What are the income limits for contributions?

Individual filers: under $110,000 Married couples filing jointly: under $160,000

What is the contribution limit?

$500 per year (in addition to traditional/Roth IRA contributions)

What is the deadline for contributions?

December 31 of the year

When can earnings be withdrawn tax free?

Before age 30 if used to pay higher-education expenses for designated beneficiary

When does the 10% early distribution tax penalty apply?

If not used for designated beneficiary's education, unless designated beneficiary is disabled or deceased, or to the extent of the scholarship

When must distributions begin?

When designated beneficiary reaches age 30

*APY (Annual Percentage Yield)
°APR (Annual Percentage Rates)