Roth vs Traditional IRAs Enhancing Your Legacy With Your IRA Putting your IRA to work for your children and grandchildren Learn More Roth IRAs Roth IRAs offer great benefits, even for those who think they don't qualify. Read this excerpt from WorthWhile magazine on the features that make Roth IRAs a unique retirement vehicle. Learn more Roth vs Traditional IRAsIs there an age limit?ROTH IRA : You can contribute to a Roth IRA at any age.TRADITIONAL IRA : You must be under age 70½ to contribute to a traditional IRA.How does my income affect how much I can contribute?ROTH IRAThe amount you can contribute to a Roth IRA:Can't exceed the amount of income you earned that year.Can't exceed the IRS-imposed limits (see below).Could be reduced—or even eliminated—based on your modified adjusted gross incomeRoth LimitsTRADITIONAL IRAThe amount you can contribute to a traditional IRA:Can't exceed the amount of income you earned that year.Can't exceed the IRS-imposed limits (see below).There are no additional restrictions based on your income.Can minors or nonworking spouses contribute to an IRA?ROTH IRAMinors and nonworking spouses may be able to contribute, but the special income rule applies.TRADITIONAL IRAMinors and nonworking spouses may be able to contribute, but the special income rule applies.THE SPECIAL INCOME RULE: A nonworking spouse may still be able to contribute to an IRA as long as that person is filing a joint tax return with a working spouse. These are known as "spousal IRAs." But the total amount contributed by both spouses can't exceed the amount of income earned by the working spouse or the IRS limits, whichever is less. Minors may also be able to contribute to an IRA, but income limits are based on the minor's income, not the parents'. IRA contribution rulesWhat are the contribution limits?ROTH IRAFor the 2016 and 2017 tax years:If you're under age 50, you can contribute up to $5,500.If you're age 50 or older, you can contribute up to $6,500.*Limits could be lower based on your income.TRADITIONAL IRAFor the 2016 and 2017 tax years:If you're under age 50, you can contribute up to $5,500.If you're age 50 or older, you can contribute up to $6,500.*Limits could be lower based on your income.The deadline for making IRA contributions for a given tax year is typically April 15 of the following year. Keep in mind that procrastination can be costly. If you make your IRA contribution at the last minute, you miss out on nearly 16 months of potential gains as well as the chance for those gains to compound over time. So the earlier you contribute to your IRA, the better.Can I claim my contribution as a deduction on my tax return?ROTH IRAYou can't deduct your Roth IRA contribution.TRADITIONAL IRAYou may be able to deduct some or all of your traditional IRA contributions. The deductible amount could be reduced or eliminated if you or your spouse is already covered by a retirement plan at work.What's the deadline for making contributions in a given year?ROTH IRAThe deadline is typically April 15 of the following year.TRADITIONAL IRAThe deadline is typically April 15 of the following year. IRA withdrawal rulesWill I pay taxes on withdrawals?ROTH IRAYou'll never pay taxes on withdrawals of your Roth IRA contributions. And you won't pay taxes on withdrawals of your earnings as long as you take them after you've reached age 59½ and you've met the 5-year holding period requirement.TRADITIONAL IRAYou'll pay ordinary income tax on withdrawals of all traditional IRA earnings and on any contributions you originally deducted on your taxes.Is there a penalty for withdrawals taken before age 59½?ROTH IRAThere are no penalties on withdrawals of Roth IRA contributions. But there's a 10% federal penalty tax on withdrawals of earnings.TRADITIONAL IRAWith a traditional IRA, there's a 10% federal penalty tax on withdrawals of both contributions and earnings.*EXCEPTIONS TO THE PENALTY TAXDistributions received before you're age 59½ may not be subject to the 10% federal penalty tax if they're:Due to your disability or death.Distributed to a reservist who was ordered or called to active duty after September 11, 2001, for more than 179 days.Or if they're to be used for:A first-time home purchase (lifetime maximum: $10,000).Postsecondary education expenses.Substantially equal periodic payments taken under IRS guidelines.Certain unreimbursed medical expenses.An IRS levy on the IRA.Health insurance premiums (after you've received at least 12 consecutive weeks of unemployment compensation).Will I have to take Required Minimum Distributions (RMDs)?Most owners of traditional IRAs and employer-sponsored retirement plan accounts (like 401(k)s and 403(b)s) must withdraw part of their tax-deferred savings each year, starting at age 70½. If you withdraw less than the RMD amount, you may owe a 50% penalty tax on the difference. Roth IRAs have no RMDs during the owner's lifetime.ROTH IRARoth IRAs have no RMDs during your lifetime.TRADITIONAL IRAYou must take your first RMD from your traditional IRA by April 1 of the year following the year you reach age 70½.For each subsequent year, you'll need to take your annual RMD by December 31.