Is a Traditional or Roth IRA right for you?
Traditional IRA | Roth IRA | ||
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Can I open and contribute to an IRA at any age? | As of 2020, you can open and contribute to a Traditional IRA at any age. | Yes, you can open and contribute to a Roth IRA at any age. | |
Is there a limit on how much I can contribute to an IRA? | For 2020, you can contribute to a Traditional IRA up to:
For 2021, you can contribute to a Traditional IRA up to:
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For 2020, you can contribute to a Roth IRA up to:
For 2021, you can contribute to a Roth IRA up to:
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Are contributions to an IRA deductible? | Yes, contributions to a Traditional IRA are deductible depending on your income, filing status, or whether your covered by a retirement plan. | No, contributions to a Roth IRA are never deductible. | |
Are there required minimum distributions from an IRA? | Yes, RMD age beginning in the year 2020 has been changed from 70 ½ to 72. If you turned aged 70 ½ on or after January 1, 2020 you are not required to begin taking your RMD until you reach age 72. | No, you do not have to take distributions from a Roth IRA regardless of age. | |
Are distributions from an IRA taxable? | Distributions from a Traditional IRA are taxed as ordinary income. If you made nondeductible contributions, not all of the distribution is taxable. | Distributions from a Roth IRA are not taxed as long as they are qualified distributions. |