Traditional vs. Roth IRA

There are advantages to both traditional and Roth IRAs. But one of the biggest differences is the time at which you see the most advantage. A traditional IRA can provide tax benefits today, while a Roth IRA has the potential for more relief at the time of retirement.

Traditional IRA

  • No income limits to open
  • No minimum contribution requirement
  • Contributions are tax deductible on state and federal income tax1
  • Earnings are tax deferred until withdrawal (when usually in lower tax bracket)
  • Withdrawals can begin at age 59½
  • Substantial penalty for early withdrawal2
  • Mandatory withdrawals at age 73

Roth IRA

  • Income limits to be eligible to open Roth IRA3
  • Contributions are NOT tax-deductible
  • Earnings are 100% tax-free at withdrawal1
  • Principal contributions can be withdrawn without penalty1
  • Withdrawals on interest can begin at age 59½
  • Substantial penalty for early withdrawal2  
  • No mandatory distribution ages
  • No age limit on making contributions as long as you have earned income
1Subject to some minimal conditions. Consult a tax advisor.
2Certain exceptions apply, such as healthcare, purchasing first home, etc.
3Consult a tax advisor.























Coverdell ESA

Ensure a smooth transition into higher education by setting up a savings account early. A Coverdell Education Savings Account (ESA) provides a safe, tax-free place to build a college fund — as well as financial confidence for a new stage in life.

  • Set aside funds for your child's education
  • No setup or annual fee
  • Dividends grow tax-free
  • Withdrawals are tax-free and penalty-free when used for qualified education expenses1
  • Designated beneficiary must be under 18 when contributions are made
  • To contribute to an ESA, certain income limits apply2
  • Contributions are not tax deductible
  • $2,000 maximum annual contribution per child
  • The money must be withdrawn by the time he or she turns 303
  • The ESA may be transferred without penalty to another member of the family
  • No minimum deposit to open
 
1Qualified expenses include tuition and fees, books, supplies, board, etc.
2Consult your tax advisor to determine your contribution limit.
3Those earnings are subject to income tax and a 10% penalty.