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	2012 Single filers full contribution:  up to $110,000 Partial contribution:  $110,000–$125,000 2013 Single filers full contribution:  up to $112,000 Partial contribution:  $112,000–$127,000 2012 Joint filers full contribution:  up to $173,000 Partial contribution:  $173,000–$183,000 2013 Joint filers full contribution:  up to $178,000 Partial contribution:  $178,000–$188,000	No income limits to make contributions5
Maximum contribution	2012: $5,000 ($6,000 if you are 50 or older) or 100% of employment compensation, whichever is less 2013: $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 15, 2013, for the 2012 tax year
Taxation at withdrawal	Contributions are always withdrawn tax-free. Earnings are federally tax-free after the five-year aging requirement has been satisfied and one of the following conditions is met: age 59½, death, disability, qualified first-time home purchase.	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
	Open a Roth IRA.	Open a Traditional IRA.

Fees and minimum investments

The minimum investment to open a Traditional IRA or Roth IRA at Fidelity is $2,500 (waived for rollovers, transfers, or if you sign up for automatic contributions). Fidelity No-Fee⁶ IRAs have no set up or maintenance fees, and no transaction fees when trading most Fidelity mutual funds.

Core positions

You have a choice of three core positions with either type of IRA. The core position is where your money is held until you choose other investments or withdraw it.

• Fidelity Government Money Market: A Fidelity money market fund.
• Fidelity Cash Reserves: A Fidelity money market fund. (This core position is only available after you open your account by calling a representative.)
• FDIC-Insured Deposit Sweep Program: An interest-bearing, cash position, with the benefit of FDIC insurance eligibility through a Program Bank.⁷ See the current interest rates.

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https://www.fidelity.com/retirement-ira/ira/ira-comparison