Traditional & Roth IRAs
An individual retirement account (IRA) can help you save for retirement with either tax-deferred or tax-free growth of any earnings. You may also choose to use an IRA to supplement your 401(k) without increasing your tax burden.
There are 2 types of IRA – traditional or Roth. You can choose one or both depending on your tax situation and income. An Ameriprise financial advisor can help you find the appropriate IRA for your situation and help you plan for your financial future.
| Comparison | Traditional IRA | Roth IRA |
|---|---|---|
|
Earnings |
Earnings are tax-deferred until withdrawn (IRS early withdrawal penalties may apply). |
Earnings grow tax-free as long as you meet the requirements. |
|
Contributions |
Contributions may be tax-deductible depending on your income and other factors. You may no longer make contributions after age 70½. |
Contributions are not tax-deductible. You may continue making Roth IRA contributions after age 70½ if you have earned income. |
|
Income requirements |
No income limit to make contributions; however, you must have earned income to contribute. |
Your adjusted gross income must be below certain limits depending on your tax filing status. |
|
Distributions |
Distributions are required at age 70½. |
You are not required to take mandatory distributions at any age during your lifetime. Beneficiaries must take distributions. |
Financial planning services and investments offered through Ameriprise Financial Services, Inc., Member FINRA and SIPC.