Thrivent Financial Bank

Bank > Individual Retirement Accounts > Comparing IRAs
Comparing IRAs

Traditional IRA

Roth IRA

Contribution Eligibility

Individuals younger than age 70 ½ who have earned income.

Individuals of any age who have earned income and modified adjusted gross income (MAGI) of less than $110,000 (single filer) or less than $160,000 (joint filers). Contributions start to phase out when MAGI exceeds $95,000 (single) or $150,000 (joint).

Maximum Annual Contribution Per Individual

For taxpayers
under age 50

For taxpayers
age 50 or over

2007
$4,000

$5,000

2008
$5,000

$6,000

For taxpayers
under age 50

For taxpayers
age 50 or over

2007
$4,000

$5,000

2008
$5,000

$6,000

Tax Advantages

Tax-deferred growth and possible income-tax deductibility of contributions

Tax-free growth on qualified distributions, as described below.

Contribution Deductibility

Yes, unless the individual and/or spouse participates in an employer-sponsored retirement plan and modified adjusted gross income (MAGI) exceeds certain dollar amounts.

No.

Distributions

Distributions made prior to age 59 ½ may be subject to a 10-percent federal tax penalty in addition to ordinary income tax. Some events qualify for federal-tax-penalty-free distributions, such as a first-time home purchase—up to a $10,000 lifetime limit—and post-secondary education expenses.

Qualified distributions are income-tax- and federal-tax-penalty-free if the IRA has been held for at least five years and the owner is age 59 ½ or older, or has become disabled or died, or for a first-time home purchase—up to a $10,000 lifetime limit.

Required Minimum Distributions

Distributions must begin by April 1 of the year following the year in which the individual reaches age 70 ½.

No pre-death distributions required.

Page Settings

Adjust Text Size:

Printer Friendly