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          1. Comparing Traditional & Roth IRAs

            Man and woman looking at tablet

            Traditional and Roth IRAs are two ways to save for retirement that have different approaches. In a nutshell, the primary difference between the two is whether you pay taxes on your contributions before you make them or when you withdraw them in retirement.

            Here are a few basics about traditional and Roth IRAs for the 2018 and 2019 tax years.

            Contributions

            Traditional IRA Roth IRA
            Anyone with earned income, and nonworking spouses filing jointly, can make a full annual contribution.
            Anyone with earned income, and nonworking spouses filing jointly, may make a full or partial contribution based on income. See 2017 IRA Contribution Limits and Deadlines for specifics.
            How much is a full annual contribution for 2018 and 2019?

            2018 Age 49 and younger $5,500

            2018 Age 50 and older: $6,500

            2019 Age 49 and younger $6,000

            2019 Age 50 and older $7,000

            Age limit to contribute?
            Year you reach 70?
            None
            Can I take a tax deduction for my contributions?
            Yes, if neither you nor your spouse has a plan at work. If either of you does, you may be able to deduct all, part or none of your contribution based on your income. See tax deductibility of traditional IRA contributions, below.
            No


            Withdrawals

            Traditional IRA Roth IRA
            When can I start withdrawals?
            Withdrawals before age 59? may be subject to an early withdrawal penalty.
            You can withdraw money you contributed any time without penalty. There may be a penalty on your contributions' earnings if you withdraw them before age 59? or within five years after making the contributions, whichever is later.
            Do I pay taxes on my withdrawals?
            Yes, except for withdrawals of contributions that were not tax-deductible when you made them.
            Withdrawals of earnings before age 59? may be subject to tax.
            Do I have to start withdrawing money at a certain age?
            Yes, at age 70? you must begin withdrawing annual minimums (known as required minimum distributions, or RMDs).
            No


            Tax deductibility of traditional IRA contributions

            Single or head of household: Not covered by employer's retirement plan

            2018 Modified Adjusted Gross Income (MAGI) Phase-Out Ranges 2019 Modified Adjusted Gross Income (MAGI) Phase-Out Ranges
            Filing Status
            Deductibility
            Filing Status
            Deductibility
            Any Amount
            Full
            Any Amount
            Full
            $63,000 or less
            Full
            $64,000 or less
            Full
            $63,001 - $72,999
            Partial
            $64,001 - $73,999
            Partial
            $73,000 or more
            None
            $74,000 or more
            None


            Tax deductibility of traditional IRA contributions

            Married filing jointly: Neither spouse covered by employer's retirement plan

            2018 Modified Adjusted Gross Income (MAGI) Phase-Out Ranges 2019 Modified Adjusted Gross Income (MAGI) Phase-Out Ranges
            Filing Status
            Deductibility
            Filing Status
            Deductibility
            Any Amount
            Full
            Any Amount
            Full


            Tax deductibility of traditional IRA contributions

            Married filing jointly: Both spouses covered

            2018 Modified Adjusted Gross Income (MAGI) Phase-Out Ranges 2019 Modified Adjusted Gross Income (MAGI) Phase-Out Ranges
            Filing Status
            Deductibility
            Filing Status
            Deductibility
            $101,000 or less Full
            $103,000 or less
            Full
            $101,001 - $120,999 Partial
            $103,001 - $122,999
            Partial
            $121,000 or more None
            $123,000 or more
            None


            Tax deductibility of traditional IRA contributions

            Married filing jointly: One spouse covered by employer's retirement plan - for covered spouse

            2018 Modified Adjusted Gross Income (MAGI) Phase-Out Ranges 2019 Modified Adjusted Gross Income (MAGI) Phase-Out Ranges
            Filing Status
            Deductibility
            Filing Status
            Deductibility
            $101,000 or less Full $103,000 or less Full
            $101,001 - 120,999 Partial $103,001 - $122,999 Partial
            $121,000 or more None $123,000 or more None


            Tax deductibility of traditional IRA contributions

            Married filing jointly: One spouse covered by employer's retirement plan - for non-covered spouse

            2018 Modified Adjusted Gross Income (MAGI) Phase-Out Ranges 2019 Modified Adjusted Gross Income (MAGI) Phase-Out Ranges
            Filing Status
            Deductibility
            Filing Status
            Deductibility
            $189,000 or less Full $193,000 or less Full
            $189,001 - $198,999 Partial $193,001 - $202,999 Partial
            $199,000 or more ?None $203,000 or above None

            Learn more

            It's important to understand all your options before deciding whether one or both plans are right for you. Here are a few places to learn more:

            Ask a financial advisor

            A key part of helping determine retirement strategies is a conversation with a financial advisor. At Edward Jones, we'll work to deeply understand your current needs, preferences and future goals to help develop a personalized strategy for you. Talk to a financial advisor today.

            More resources:

            IRA Contribution Limits & Deadlines

            What you need to know about 2018 and 2019 IRA contribution limits and deadlines.

            Are You Choosing the Right Financial Advisor?

            Get the important questions answered so you can feel comfortable choosing.

            Find a Financial Advisor

            Find a Financial Advisor

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