• Print
  • Default text size A
  • Larger text size A
  • Largest text size A

Compare Roth IRA vs. Traditional IRA

The two main types of IRAs that can help you save for retirement are Traditional and Roth. Use this chart to help determine which one may be right 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

No age restrictions with employment compensation4

Must be under age 70½ with employment compensation4

Eligibility: Income

Income limits apply to make contributions

See income eligibility

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Contributions are always withdrawn tax-free.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

Pre-tax contributions and any earnings are taxable when withdrawn.

Penalties at withdrawal

Non-qualified withdrawals are 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)

No minimum required distributions during the lifetime of the original owner

Minimum required distributions starting at 70½

Learn more about Roth IRAs Learn more about Traditional IRAs
Maximum contribution

For both 2015 and 2016: $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

Monday, April 18, 2016, for the 2015 tax year**

Minimum investments

There is no minimum to open a Fidelity Traditional IRA or Roth IRA but investment minimums will apply (some investment minimums may be waived for rollovers or transfers, or if you sign up for automatic contributions).

Fees

Fidelity IRAs have no set up or maintenance fees, and no transaction fees when trading most Fidelity mutual funds

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. Be sure to consider all your available options and the applicable fees and features of each before moving your retirement assets.
2. 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.
3. 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.
4. For a Traditional IRA, full deductibility of a contribution for 2015 is available to active participants whose 2015 Modified Adjusted Gross Income (MAGI) is $98,000 or less (joint) and $61,000 or less (single); partial deductibility for MAGI up to $118,000 (joint) and $71,000 (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 $183,000 for 2015; partial deductibility for MAGI up to $193,000. For 2016 full deductibility of a contribution is available to active participants whose 2016 Modified Adjusted Gross Income (MAGI) is $98,000 or less (joint) and $61,000 or less (single); partial deductibility for MAGI up to $118,000 (joint) and $71,000 (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 $184,000 for 2016; partial deductibility for MAGI up to $194,000.
5. You must be at least 18 years old to open an IRA with Fidelity.
6. At least one spouse must have employment compensation to use a Traditional IRA.
7. 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.

Guidance provided is educational.

* The customer story provided may have been edited for clarity, may not be representative of the experiences of all customers, and does not guarantee future results. The information provided is general in nature, is provided for informational purposes only, and should not be construed as investment advice. The products and services described are provided solely on behalf of Fidelity Brokerage Services LLC.
** MA and ME residents have until Tuesday, April 19, 2016 to make a 2015 prior year contribution due to the Patriot's Day holiday
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.
560610.10.0
close

Open an account

Choose a Traditional IRA or Roth IRA. If you are transferring an existing IRA to Fidelity, choose the same type as the current account.

Open a Traditional IRA

Open a Roth IRA

close

Roth IRA Eligibility: Income

2015 Single filers full contribution:
up to $116,000

Partial contribution:
$116,000–$131,000

2016 Single filers full contribution:
up to $117,000

Partial contribution:
$117,000–$132,000

2015 Joint filers full contribution:
up to $183,000

Partial contribution:
$183,000–$193,000

2016 Joint filers full contribution:
up to $184,000

Partial contribution:
$184,000–$194,000