Are you preparing for retirement, but uncertain as to which Individual Retirement Plan available out there is right for you? You got to compare your choices. Do you feel a Traditional IRA is right for you or is it the Roth IRA?
Learn the basics and compare. Here are some quick tips that may be of help:
- Is there an age limit for contribution? For a Traditional IRA, there is an age limit. You must be under age 70 1/2 in the contribution year to contribute. However, a long as you have earned income and your spouse is under 70 1/2 in the contribution year, you can still make a contribution to your spouse IRA. For Roth IRA, there is none.
- What are the tax advantages? A Traditional IRA is tax-deferred while a Roth IRA is tax-free.
- Are rollovers and transfers permitted? Yes to both.
- What is the contribution deadline? April 18th
- What is the contribution limit? There is no income limit for Traditional IRA. For Roth IRA, a single filers full contribution for 2011 is up to $107,000 and partial contribution is between $107,000-$122,000. Joint filers full contribution for 2011 is up to $169,000 and partial contribution is within the $169,000-$179,000 range.