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| ira comparison Not sure which account is right for you? Compare the various account types below, or call us to speak to one of our IRA specialists. . |
| INDIVIDUAL RETIREMENT ACCOUNT |
Traditional IRA |
Roth IRA |
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Coverdell Education Savings Account (CESA) |
| Eligibility | Who are under the age of 70 ½ for the entire tax year. | No age limitations. | No age limitations. Must be a self-employed individual including a corporation, partnership, or sole-proprietor. | Only eligible for a child who is under the age of 18 years old. |
| Income Eligibility | Must have taxable compensation for the entire year. | Must have taxable compensation for the entire tax year. | Must have taxable compensation for the entire tax year. | You are eligible if your modified adjusted gross income (MAGI) does not exceed certain limits. There is no requirement that the contributor have earned income or be under a certain age. |
| Tax Deductions | Deductible contributions are based on whether you or your spouse are an active participant in any other employer-sponsored retirement plan. The deductible amount is dependent on your modified adjusted gross income (MAGI) and income tax-filing status. Your tax professional can help determine your actual deduction. | Contributions made to your Roth IRA are not tax deductible. | The company may contribute up to 25% of each employee’s compensation or $42,000, whichever is less. Every dollar deposited into a SEP for the company and the employee qualifies as a deduction. | The earnings are tax free if used for a qualified education purpose. |
| Contribution Deadline | April 15th for contributions made for prior tax year. | April 15th for contributions made for prior tax year. | On or before the employers tax filing due date. | April 15th for contributions made for prior tax year. |
| Distributions | Distributions are subject to a 10 percent premature-distribution penalty tax if made prior to age 59½. | Certain qualified distributions are penalty and tax free. | Subject to IRS penalty of 10% if under the age of 59½. | If a nonqualified distribution is taken, the earnings portion is subject to tax and a 10% penalty tax. |
| Mandatory Distributions | Required distributions must begin by April 1 following the year in which you reach age 70½. | No mandatory distribution required. | Required distributions must begin by April 1 following the year in which you reach age 70½. | Any balance left in the account on the date the designated beneficiary attains age 30, within 30 days of that date earnings will be subject to federal income tax and a 10% penalty tax. |
| INDIVIDUAL RETIREMENT ACCOUNT |
Traditional IRA |
Roth IRA |
|
Coverdell Education Savings Account (CESA) |
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