You decide which is right for you.

Roth IRAs

Contributions: Each year you can contribute $5,500 to your IRA, plus an additional $1,000 for catch-up contribution if you have reach age 50 or older.

Taxes: Roth IRA contributions are never eligible to deduct contributions and in turn get a tax break for the year you made the contribution.

Age limits: There are no age limits to contributions; you can contribute as long as you’re employed and earning money.

Income limits: Your salary helps determine the amount you can contribute to your Roth IRA. For example, if your tax-filing status is single and your MAGI income exceeds $127,000 you may not contribute to a Roth IRA. If you make between $112,000-$127,000 you must use a special formula to determine the dollar amount that you may contribute to your Roth IRA (this is called a "phased out" contribution). Talk with your tax accountant to find out what your contribution limit is based on your income.

RMDs: Roth IRAs are not subject to required minimum distributions, also known as RMDs. That means that you won’t ever be required to take a distribution from your IRA.

Penalties: When taking a distribution from your IRA, they are generally tax and penalty-free as long as you have either reached 59.5, you are disabled, your beneficiary receives the distribution upon your death or the amount is used to purchase your first home.

Traditional IRAs

Contributions: Just like Roth IRAs each year you can contribute $5,500 to your IRA, plus an additional $1,000 for catch-up contribution if you have reach age 50 or older.

Taxes: You are potentially eligible to deduct Traditional IRA contributions and in turn get a tax break for the year you make the contribution. In order to receive that tax break though you must meet certain requirements.

Age limits: You can only contribute to your Traditional IRA until you reach the age 70.5.

Income limits: There are no limits to contributions based on your income.

RMDs: Traditional IRAs are subject to required minimum distributions (RMDs). You must begin to take RMDs by April 1 of the year following the year you reach age 70.5. Regardless if you need the funds you must start taking this distribution.

Penalties: Traditional IRA contributions are generally treated as ordinary income and subject to income taxes. If you withdraw from your IRA before 59.5 you may be subject to early-distribution penalties.