{"id":5610,"date":"2019-01-05T20:00:53","date_gmt":"2019-01-06T01:00:53","guid":{"rendered":"http:\/\/billlosey.com\/?p=5610"},"modified":"2019-01-05T20:00:53","modified_gmt":"2019-01-06T01:00:53","slug":"traditional-vs-roth-iras","status":"publish","type":"post","link":"https:\/\/billlosey.com\/knowledge-center\/traditional-vs-roth-iras\/","title":{"rendered":"Traditional vs. Roth IRAs"},"content":{"rendered":"\n

Perhaps\nboth traditional and Roth IRAs can play a part in your retirement plans.<\/em><\/p>\n\n\n\n

IRAs can be an important tool\nin your retirement savings belt, and whichever you choose to open could have a\nsignificant impact on how those accounts might grow. <\/p>\n\n\n\n

IRAs, or Individual\nRetirement Accounts, are investment vehicles used to help save money for\nretirement. There are two different types of IRAs: traditional and Roth.\nTraditional IRAs, created in 1974, are owned by roughly 35.1 million U.S.\nhouseholds. And Roth IRAs, created as part of the Taxpayer Relief Act in 1997,\nare owned by nearly 24.9 million households.<\/p>\n\n\n\n

Both kinds of IRAs share many\nsimilarities, and yet, each is quite different. Let’s take a closer look.<\/p>\n\n\n\n

Up to certain limits,\ntraditional IRAs allow individuals to make tax-deductible contributions into\nthe retirement account. Distributions from traditional IRAs are taxed as\nordinary income, and if taken before age 59\u00bd, may be subject to a 10% federal\nincome tax penalty. For individuals covered by a retirement plan at work, the\ndeduction for a traditional IRA in 2019 has been phased out for incomes between\n$103,000 and $123,000 for married couples filing jointly and between $64,000\nand $74,000 for single filers.<\/p>\n\n\n\n

Also, within certain limits,\nindividuals can make contributions to a Roth IRA with after-tax dollars. To\nqualify for a tax-free and penalty-free withdrawal of earnings, Roth IRA\ndistributions must meet a five-year holding requirement and occur after age\n59\u00bd. Like a traditional IRA, contributions to a Roth IRA are limited based on\nincome. For 2019, contributions to a Roth IRA are phased out between $193,000\nand $203,000 for married couples filing jointly and between $122,000 and\n$137,000 for single filers.<\/p>\n\n\n\n

In addition to contribution and\ndistribution rules, there are limits on how much can be contributed to either\nIRA. In fact, these limits apply to any combination of IRAs; that is, workers\ncannot put more than $6,000 per year into their Roth and traditional IRAs\ncombined. So, if a worker contributed $3,500 in a given year into a traditional\nIRA, contributions to a Roth IRA would be limited to $2,500 in that same year.<\/p>\n\n\n\n

Individuals who reach age 50\nor older by the end of the tax year can qualify for annual \u201ccatch-up\u201d\ncontributions of up to $1,000. So, for these IRA owners, the 2019 IRA\ncontribution limit is $7,000.\n\nIf you meet the income requirements, both\ntraditional and Roth IRAs can play a part in your retirement plans. And once\nyou\u2019ve figured out which will work better for you, only two tasks remain: open\nan account and fund it annually.\n\n\n\n<\/p>\n","protected":false},"excerpt":{"rendered":"

Perhaps both traditional and Roth IRAs can play a part in your retirement plans. IRAs can be an important tool in your retirement savings belt, and whichever you choose to open could have a significant impact on how those accounts […]<\/p>\n","protected":false},"author":3,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[18],"tags":[],"class_list":["post-5610","post","type-post","status-publish","format-standard","hentry","category-blog"],"_links":{"self":[{"href":"https:\/\/billlosey.com\/knowledge-center\/wp-json\/wp\/v2\/posts\/5610","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/billlosey.com\/knowledge-center\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/billlosey.com\/knowledge-center\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/billlosey.com\/knowledge-center\/wp-json\/wp\/v2\/users\/3"}],"replies":[{"embeddable":true,"href":"https:\/\/billlosey.com\/knowledge-center\/wp-json\/wp\/v2\/comments?post=5610"}],"version-history":[{"count":0,"href":"https:\/\/billlosey.com\/knowledge-center\/wp-json\/wp\/v2\/posts\/5610\/revisions"}],"wp:attachment":[{"href":"https:\/\/billlosey.com\/knowledge-center\/wp-json\/wp\/v2\/media?parent=5610"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/billlosey.com\/knowledge-center\/wp-json\/wp\/v2\/categories?post=5610"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/billlosey.com\/knowledge-center\/wp-json\/wp\/v2\/tags?post=5610"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}