Comparison Chart
| Features | Traditional IRA | Roth IRA | Simple IRA | Education Savings Account |
|---|---|---|---|---|
| Tax Benefits | Tax-deferred growth Contributions may be tax-deductible1 | Tax -free growth Tax-free qualified withdrawals2 |
Tax-deferred growth | Tax-free distributions for qualified educational expenses3 |
| Eligibility | Must have earned income and be under 701/2 | Must have earned income, no age limit. Your ability to contribute to a Roth IRA depends on your income level. | Small business, must employ 100 or fewer employees. Must meet compensation and service requirements on Form 5304-SIMPLE. | No minimum age |
| Annual Contributions | $5,500 or 100% of employment compensation, whichever is less | $5,500 or 100% of employment compensation, whichever is less | $12,500 or 100% of employee compensation, whichever is less | $2,000 annually per child, Modified Adjusted Gross Income (MAGI) limits of the Contributor apply |
| Catch-up Contributions | Individuals age 50 or older (in the calendar year of their contribution) can contribute an additional $1,000 each year | Individuals age 50 or older (in the calendar year of their contribution) can contribute an additional $1,000 each year | Employees age 50 or over are eligible for a $3,000 catch-up salary deferral contribution. | NA |
| Normal Distribution Age | Age 59 1/2 | Contribution amounts are available for distribution at any time. | Age 59 1/2 | Anytime for qualified expenses |
| Taxation of Distributions | Withdrawals of pre-tax contributions any earnings are taxable when distributed | Contributions are always withdrawn tax-free. Earnings are tax-free after the five-year aging requirement and certain conditions have been met | Withdrawals are taxable when distributed | Contributions and earnings are tax -free if qualified. Non-qualified earnings are taxable. |
| Federal Distribution Penalties | Withdrawal penalty of 10% if you are under the age of 59 1/2 (Some exceptions apply.)4 | 10% tax on withdrawal of earnings if under 591/2 unless an exception applies | 25% tax if withdrawn within 2 years of account opening, 10% after 2 years | 10% tax on nonqualified distributions |
| Required Minimum Distributions | Mandatory at age 701/2 | Not Required | Mandatory at age 701/2 | Full distribution to minor beneficiary by age 30 |
| Contribution Deadline | Tax-filing deadline for the year, usually April 15th of the following year. | Tax-filing deadline for the year, usually April 15th of the following year. | Tax-filing deadline for the year, usually after April 15th of the following year. | Tax-filing deadline for the year, usually after April 15th of the following year. |
1Modified Adjusted Gross Income (MAGI) limits and participation status in employer sponsored plans determine contribution deductibility.
2A distribution from a Roth IRA is federally tax-free and penalty-free provided that the five-year aging requirement has been satisfied and one of the following conditions is met: age 59½, qualified first time home purchase, or death.
3Qualified education expenses may include tuition, fees, books, computer equipment and technology required for elementary, secondary and post-secondary education.
4Exceptions include: first time home purchase ($10,000 lifetime limit), certain higher education expenses, certain qualifying medical or health insurance expenses, withdrawals made by your beneficiary after your death.
SEP IRAs also available.
For additional conditions and fees relative to the above listed accounts please see our Truth in Savings Disclosure and Schedule of Fees.
