Traditional IRA vs. Roth IRA 2011

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.

 

 

 

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