Understanding the difference between Roth IRA and Traditional IRA.
                     UNDERSTANDING THE DIFFERENCE 
BETWEEN ROTH IRA AND 
TRADITIONAL IRA
WHAT IS AN IRA?
IRA stands for Individual Retirement 
Account, and it's basically a savings 
account with big tax breaks, making it an 
ideal way to sock away cash for your 
retirement.
Source: money.cnn.com
WHAT IS ROTH IRA?
A Roth IRA is an individual retirement 
account under United States law that is 
generally not taxed upon distribution, 
provided certain conditions are met.
Source: Wikipedia
WHAT IS TRADITIONAL 
IRA?
A traditional IRA is an individual retirement 
arrangement, established in the United 
States by the Employee Retirement 
Income Security Act of 1974.
Source: Wikipedia
DIFFERENCES BETWEEN ROTH 
AND TRADITIONAL IRAS
INCOME LIMITS
Contributions to traditional IRAs do not 
have income limits for savers who 
contribute to these kinds of accounts 
(though high earners may not get the 
upfront tax break).
Roth IRA contributions, however, do have 
income limits. 
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AGE LIMITS
The rules for traditional IRAs prevent you 
from making contributions once you turn 
70½.
But the same doesn’t apply to Roth IRAs. 
You can continue to contribute to those 
accounts at any age,  if you have the 
earned income wages or self-employment 
income to do so.
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PLAN PARTICIPATION
Your participation in a retirement plan 
generally doesn’t affect either traditional 
or Roth IRA accounts.
It is important to note, however, that with 
a traditional IRA, you may not be eligible 
for the deduction depending on your 
income.
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REQUIRED MINIMUM 
DISTRIBUTIONS
The rules around required minimum 
distributions mark the biggest difference 
between traditional and Roth IRAs.
With traditional IRAs, you are forced to 
take distributions starting at age 70½. 
Roth IRAs aren’t subject to required 
minimum distribution rules.
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MONEY WITHDRAWALS
If you withdraw from a traditional IRA 
before retirement, you will pay tax on that 
money.
Roth IRAs, on the other hand, can be 
withdrawn from at any time for any 
reason, penalty free.
Source: www.cnbc.com
THANK YOU