Individual Retirement Accounts
Frequently Asked Questions


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What is the difference between a Traditional and a Roth IRA?

Traditional IRA contributions may be tax-deferred. The funds used to make contributions may be deducted on your income tax return for the year the contribution is made (if you qualify to do so). You pay taxes on the contributions and earnings when the funds are withdrawn. Mandatory distributions are required from a Traditional IRA beginning the year you reach the age of 70 1/2. At that time contributions are no longer allowed. Roth IRA contributions are not tax-deferred. There are income limits for individuals wishing to establish a Roth IRA. There is no mandatory age at which the funds must be withdrawn from a Roth IRA, and as long as you are receiving qualified compensation you may continue to contribute. After the age of 59 1/2 all contributions and earnings withdrawn from a Roth IRA are tax-free, as long as the account has been open for five years.

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