• Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar
  • Skip to footer
  • Home
  • Who We Are
    • About Our Firm
    • Career Opportunities
    • Meet Our Team
    • News and Events
    • Seniors Rock Radio
  • Estate Planning
    • Elder Law & Medicaid Planning
    • Estate Planning Services
    • Estate and Gift Tax Figures
    • Family Farm Succession Planning
    • Family-Owned Businesses & Farms
    • IRA Planning
      • Planning With An IRA
      • IRA & Retirement Planning
    • Legacy Planning Services
    • LGBTQ Estate Planning
    • Pet Planning
    • SECURE Act
    • Special Needs Planning
    • Trust Administration & Probate
    • Young Families
  • Elder Law
    • Coping With Alzheimer’s
    • Elder Law Resources
      • Elder Law Reports
    • Guardianship & Conservatorship
    • Hospice Care
    • Veteran’s Benefits
  • Resources
    • Definitions
    • FREE Estate Planning Worksheet
    • FREE Webinars
    • Estate Administration Legal Guide
    • Estate Planning Articles
      • Questions for Your Estate Planning Attorney Before Creating Your First Estate Plan
      • How to Create Your First Estate Plan in 2022
      • How to Choose a Guardian for Your Child
      • Address These Three Questions in Your First Estate Plan
    • Estate and Gift Tax Figures
    • Frequently Asked Questions
      • Adult Guardianship
      • Alzheimer’s Care
      • Custodial Accounts for Minors
      • Estate Planning
      • FAQs for Families Without an Estate Plan
      • Elder Law
      • IRA & Retirement Planning
      • Is Your Estate Plan Outdated?
      • Legacy Planning
      • LGBTQ Estate Planning
      • Medicare and Social Security
      • Probate
      • Probate Avoidance
      • Irrevocable Trusts
      • Trust Administration
      • Trusts
      • Veterans’ Benefits
      • Wills
    • Newsletters
    • Reports
      • Advanced Estate Planning
      • Basic Estate Planning
      • Estate Planning for Niches
      • Trust Administration
    • Top Estate Planning Techniques
  • Reviews
    • Our Reviews
    • Review Us
  • Medicaid Planning
    • Medicaid Planning
    • Emergency Medicaid & Nursing Home Planning
    • Medicaid Frequently Asked Questions
    • Medicaid Resources
  • Blog
  • Contact Us

Law Office of Michael Robinson, P.C.

Estate Planning Services in Rochester, New York and the Finger Lakes Area

Connect With Us Today

(585) 374-5210
Law Pay Button
Attend a Free Webinar
Home » Retirement Planning » IRAs: Traditional vs. Roth

IRAs: Traditional vs. Roth

August 20, 2010Retirement Planning

Are you considering opening an Individual Retirement Account? There are several types to choose from, but the two most common are Traditional and Roth IRAs. Both are excellent savings opportunities, but they vary in several ways.

Tax Deferred versus Tax Free Earnings

A traditional IRA allows you to save non-taxed income for your retirement. When you contribute to this type of account, the amount is deducted from your yearly taxable earnings. This allows you to defer taxes on this money and to grow it tax-free until your retirement.

Funds deposited into a Roth IRA are taxable in the year contributed. This means you will pay taxes on all of your income. The benefit to a Roth IRA is that you do not have to pay taxes later when you withdraw the money. This allows you to pay your taxes at a tax level you already know about, versus waiting to see what future taxes may be.

Investments

Both Traditional and Roth IRAs allow you to control your investment options. You can invest your retirement account in stocks, bonds, money markets and many other opportunities. There is no difference in how you can invest either of these accounts.

Withdraw Penalties

If you have a traditional account, you cannot make any early withdraws without receiving a penalty fee. You cannot even touch your principal investment. With a Roth IRA, however, you can take out your initial investment if you need it. Beyond the principal amount, any other early Roth withdraws will be penalized. With both types of accounts, there are special circumstances that may apply to allow you to avoid the 10% penalty for withdrawing funds early.

Distribution Age

With both types of IRA accounts, you can begin to receive distributions at age 59 ½. If you have a Traditional IRA, you are required to begin withdraws by age 70 ½ if you have not already done so. There is no mandatory age for distribution if you have a Roth IRA.

Income Limits

Traditional IRAs are a more common option because anyone can use this type of account and there is no earnings requirement. If you wish to open a Roth IRA you must earn at least 95,000 a year if you are single or 150,000 if you are married.

  • Author
  • Recent Posts
Michael Robinson, Estate Planning Attorney
Michael Robinson, Estate Planning Attorney
Clients notice Michael Robinson’s unique approach to his estate planning practice the minute they walk through his office doors.
Michael Robinson, Estate Planning Attorney
Latest posts by Michael Robinson, Estate Planning Attorney (see all)
  • How Estate Planning for a Family May Trap the Unwary Practitioner - August 31, 2022
  • State Income Taxation of Social Security Benefits - August 24, 2022
  • Understanding Tax Apportionment Clauses - August 17, 2022

Other Articles You May Find Useful

Just When You Thought You Understood The 10 Year Rule Think Again 150x150
Just When You Thought You Understood the 10-Year Rule, Think Again
Application Of The Updated Life Expectancy Tables 150x150
Application of the Updated Life Expectancy Tables
Medicare eligibility age 09
Medicare Eligibility Age May Go Down
SECURE Act 2.0
Secure Act 2.0: More Potential IRA Changes
Medicare premiums 2021
A Look At 2021 Medicare Cost Increases
retirement planning 3
2021 Social Security Updates Have Been Released

Primary Sidebar

Law Office of Michael Robinson, P.C.

Blog Subscription

  • This field is for validation purposes and should be left unchanged.

Follow Us

  • Facebook
  • Twitter
  • Linkdin
  • Youtube

TESTIMONIALS

News & Events

Seniors Rock Radio Show Recording 5-1-21

https://drive.google.com/file/d/1U7UkQbEGy-xY7XFAXvX9Qz7pKSVDVV3D/view?usp=drive_web   Author Recent Posts Michael Robinson, Estate Planning AttorneyClients notice Michael Robinson’s unique approach to his estate planning practice the minute they walk through his office doors. Latest posts by Michael Robinson, Estate Planning Attorney (see all) How Estate Planning for a Family May Trap the Unwary Practitioner -... Read more →

Pittsford Office

1163 Pittsford-Victor Road, Suite 120 (Powder Mill Office Park)
Pittsford, NY 14534-3817
Phone: (585) 374-5210
Fax: (585) 485-0394

See Larger Map Get Directions

Map

mrobinson_sidbr_map

Footer

  • Advantages of Working With Our Firm
  • About The American Academy
  • Disclaimer
  • Privacy Policy
  • Sitemap
  • Contact Us

Connect with Us

  • Facebook
  • Twitter
  • Linkdin
  • Youtube
robinson law logo

The Law Office of Michael Robinson, P.C.

Attorney Advertisement


© 2023 American Academy of Estate Planning Attorneys, Inc.