Traditional IRA

ROTH IRA

What is the maximum annual contribution (2012)?*

Lesser of $5,000 or 100% of earned income ($6,000 if age 50 or older)

Lesser of $5,000 or 100% of earned income ($6,000 if age 50 or older)

What is the maximum annual contribution to a spousal IRA (for a spouse with little or no earned income) (2012)?*

Lesser of $5,000 or 100% of combined earned income ($6,000 if age 50 or older)

Lesser of $5,000 or 100% of combined earned income ($6,000 if age 50 or older)

Is your ability to contribute phased out for higher incomes?

No

Yes ( a single person earning <$107,000 or a married couple earning <$169,000 would not be subject to contribution restrictions)

Is your contribution tax deductible on your federal income tax return?

Yes. Fully deductible if neither you nor your spouse is covered by a retirement plan. Otherwise, your deduction depends on your income and filing status.

No. Contributions to a Roth IRA are never tax deductible.

How are earnings taxed?

Tax deferred

Tax deferred; tax free if you meet therequirements for a qualified distribution

Are distributions included in your taxable income?

Yes, to the extent that the distribution consists of tax-deductible contributions and investment earnings

Qualified distributions are completely tax free; otherwise, the portion that represents investment earnings is included in your taxable income

Are you required to take distributions during your life?

Yes, the required minimum distribution (RMD) rule applies after you reach age 70½

No, distributions are not required until after your death

Can contributions be made after age 70½?***

No

Yes, if you have earned income

Does a 10% early withdrawal penalty apply to distributions made before age 59½?

Yes, on the taxable portion of the distribution**

Yes, on the taxable portion of the distribution**

Includable in your taxable estate at death?

Yes

Yes

Do your beneficiaries pay income tax on distributions after your death?

Yes, to the extent that a distribution represents deductible contributions and investment earnings

Generally no, as long as the account has been in existence for at least five years