Roth or Traditional, Spencer has the right IRA for you - An Overview

Contributions to a Traditional IRA and a Roth IRA must be aggregated when applying the annual contribution limit. This contribution may be based on the combined income of the individual and the individual's spouse if the individual is married, filing a joint federal income tax return, using the spousal contribution rules.

	Traditional IRA	Roth IRA
Annual contribution limit	$5,000 (100% of earned income, if less)	$5,000 (100% of earned income, if less)
Age restrictions for contributions	Tax-year contributions may be made only for years before age 70 1/2.	None. Contributions may be made at any age.
Contribution MAGI phase-out ranges	Not applicable. Contribution eligibility not limited by level of income.	$95,000 - $110,000 for single. $150,000 - $160,000 for married filing jointly. $0 - $10,000 for married filing separately.
Deductibility of contributions	Full deduction is available if you (and your spouse, if married) are not an active participant in an employer-sponsored retirement plan. If you are an active participant (or your spouse is, if married) deductibility will depend on MAGI.	Not applicable. Contributions are never deductible.
MAGI limits for rollover eligibility	None. Rollover from a Traditional IRA is not limited by income. Rollover from Roth IRA is not allowed.	Rollover from Traditional IRA to Roth IRA not allowed if MAGI over $100,000 or if married filing separately. Rollover from Roth IRA not limited by income.
Age based distribution Requirements	Must begin by April 1 of the year after year in which owner attains age 70 1/2.	None. Distributions are not required during life of the owner.
Taxation of distributions	Fully taxable except for return of any non-deductible contributions in any Traditional IRA of the holder. The nondeductible contributions, if any, are returned as a part of every distribution.	Tax-free after five-years participation in Roth IRA if distributed after age 591/2, after owner's death, while owner is disabled, or if used for a first-time home purchase ($10,000 lifetime maximum). Otherwise, earnings are taxable when distributed. Contributions which, except for 1998 conversion assets, are not taxable when distributed, are distributed first.
IRS 10% early distribution penalty	Applied to taxable portion of distributions prior to age 59 1/2 unless exception applies.	Applied to certain distributions prior to age 59 1/2 unless exception applies.