Roth vs. Traditional

Which road to take?

With both traditional IRAs and Roth IRAs to choose from, it is may be difficult to know which way to turn with your savings. If eligible, a Roth IRA is often the best way to save for retirement because of the opportunity for tax-free distributions. In addition, there are no required minimum distributions (RMDs) from Roth IRAs and no age limit on contributions.

But despite the benefits of choosing a Roth IRA, keep in mind that each situation is different. Some people may prefer the ability to deduct contributions, and turn to a traditional IRA as a result. And, you can always choose to split your contribution between the two, and enjoy the benefits of both types of IRAs. Be sure to consult with your tax advisor before making a decision on which road to take for your personal savings.

  Tradtional IRA Roth IRA

Contribution Limit





Income Limit


Age Limit



Tax Treatment






Required Minimum Distributions




Same annual contribution limit as the Roth with a catch-up contribution available for those age 50 and over.

Contributions may be deductible based on tax filing status and active participation in an employer plan.

No income limit on contributions, only on deductibility.

No contributions can be made after taxpayer reaches age 70½.

Earnings grow tax deferred. 


Distributions may be taken at any time  and and will be treated as ordinary income. Distributions may be subject to the 10% early withdrawl penalty if withdrawn before age 59½. 

Traditional IRA owners must begin minimum distributions by April 1 of the year they turn 70½, and traditional IRA beneficiaries are subject to RMD rules. 


Can accept rollovers from traditional IRAs, SIMPLE IRAs, SEP-IRAs, qualified plans, 403(b) plans, and governmental 457 plans.

Same annual contribution limit as the traditional IRA, with a catch-up contribution available for those age 50 and over.

Contributions are never deductible.


Income limits may prevent a taxpayer from making contributions.

No age limit on contributions.

Earnings grow tax deferred, and for qualified distributions, earnings are withdrawn tax free.

Distributions may be taken at any time and are tax and penalty free if qualified. Non-qualified distributions may be subject to the 10% early withdrawal penalty

Roth IRA owners are not required to take minimum distributions, although Roth IRA beneficiaries are also subject to RMD rules.


Can accept rollovers from Roth IRA and Roth 401(k) accounts. Can convert a traditional IRA or a qualified plan to a Roth IRA.

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When it comes time to purchase an IRA, you have a variety of product choices for your investment. Check with an advisor for information about the MEMBERS products available for purchase as an IRA.

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For more information about all the rules associated with IRAs, the Internal Revenue Service makes available Publication 590 on Individual Retirement Arrangements. For more information on IRAs or to download Publication 590, visit