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Compare Roth IRA vs. Traditional IRA

There are two main types of IRAs to help you save for retirement: Traditional and Roth. Use this chart to help determine which one may be the most advantageous for you.

Note: A Rollover IRA is a Traditional IRA often used for rollovers from an old workplace plan, such as a 401(k).


Roth IRA Traditional IRA
Tax benefits

Tax-free1 growth

Tax-free qualified1 withdrawals

Tax-deferred growth2

Contributions may be tax-deductible3

Eligibility: Age

Any age with employment compensation4

Under age 70½ with employment compensation4

Eligibility: Income See income limits to make contributions

No income limits to make contributions5

Taxation at withdrawal

Contributions are always withdrawn tax-free.

Earnings are federally tax-free after the five-year aging requirement has been satisfied and certain conditions are met.6

Withdrawals of pre-tax contributions and any earnings are taxable when distributed.

Penalties at withdrawal

A non-qualified distribution is subject to taxation of earnings and a 10% additional tax unless an exception applies.1

Withdrawals before 59½ may be subject to a 10% early withdrawal penalty unless an exception applies.2

Minimum required distributions (MRDs)

Not subject to minimum required distributions during the lifetime of the original owner

MRDs starting at 70½

Maximum contribution

For both 2013 and 2014: $5,500 ($6,500 if you are 50 or older) or 100% of employment compensation, whichever is less

Catch-up contribution

Individuals age 50 or older (in the calendar year of their contribution) can contribute an additional $1,000 each year

Contribution deadline

Tuesday, April 15, 2014, for the 2013 tax year

Fees and minimum investments

The minimum investment to open a Traditional IRA or Roth IRA at Fidelity is $2,000 (waived for rollovers, transfers, or if you sign up for automatic contributions). Fidelity IRAs have no set up or maintenance fees, and no transaction fees when trading most Fidelity mutual funds.


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Roth IRA Eligibility: Income

2013 Single filers full contribution:
up to $112,000

Partial contribution:
$112,000–$127,000

2014 Single filers full contribution:
up to $114,000

Partial contribution:
$114,000–$129,000

2013 Joint filers full contribution:
up to $178,000

Partial contribution:
$178,000–$188,000

2014 Joint filers full contribution:
up to $181,000

Partial contribution:
$181,000–$191,000

An investment in a money market fund is not insured or guaranteed by the Federal Deposit Insurance Corporation or any other government agency. Although the fund seeks to preserve the value of your investment at $1.00 per share, it is possible to lose money by investing in the fund.
1. A distribution from a Roth IRA is federally tax-free and penalty-free provided that the five-year aging requirement has been satisfied and one of the following conditions is met: age 59½, qualified first time home purchase, or death.
2. For Traditional IRAs, penalty-free withdrawals include but are not limited to: qualified higher education expenses; qualified first home purchase (lifetime limit of $10,000); certain major medical expenses; certain long-term unemployment expenses; disability; or substantially equal periodic payments.
3. For a Traditional IRA, full deductibility of a contribution for 2013 is available to active participants whose 2013 Modified Adjusted Gross Income (MAGI) is $95,000 or less (joint) and $59,000 or less (single); partial deductibility for MAGI up to $115,000 (joint) and $69,000 (single). In addition, full deductibility of a contribution is available for working or nonworking spouses who are not covered by an employer-sponsored plan whose MAGI is less than $178,000 for 2013; partial deductibility for MAGI up to $183,000. For 2014 full deductibility of a contribution is available to active participants whose 2014 Modified Adjusted Gross Income (MAGI) is $96,000 or less (joint) and $60,000 or less (single); partial deductibility for MAGI up to $116,000 (joint) and $70,000 (single). In addition, full deductibility of a contribution is available for working or nonworking spouses who are not covered by an employer-sponsored plan whose MAGI is less than $181,000 for 2014; partial deductibility for MAGI up to $191,000.
4. You must be at least 18 years old to open an IRA with Fidelity.
5. At least one spouse must have employment compensation to use a Traditional IRA.
6. Certain types of IRAs with Fidelity may be eligible to use an FDIC-Insured Deposit Sweep Program core position. The cash balance in the FDIC–insured Deposit Sweep Program is swept to an FDIC–insured interest-bearing account at a Program Bank. The deposit at the Program Bank is not covered by SIPC. The deposit is eligible for FDIC insurance subject to FDIC insurance coverage limits. All assets of the account holder at the depository institution will generally be counted toward the aggregate limit. The Program Bank will be assigned to your account during the account opening process. See the current list of eligible Program Banks. For more information, please see the FDIC–insured Deposit Sweep Program Disclosure (PDF). For more information about FDIC insurance coverage, please visit the FDIC Web site at www.FDIC.gov or call 877–ASK–FDIC. Customers are responsible for monitoring their total assets at the Program Bank to determine the extent of available FDIC insurance. All FDIC insurance coverage is in accordance with FDIC rules.
Before investing, consider the funds' investment objectives, risks, charges, and expenses. Contact Fidelity for a prospectus or, if available, a summary prospectus containing this information. Read it carefully.
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