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Size up the basic IRA types

Roth and traditional IRAs overlap in some areas but go their own way in others. We can help you understand the differences.

Factors like your age, your income, and possible tax consequences may influence whether you choose a Roth or traditional IRA.

Key elements of a Roth IRA


No taxes on withdrawals of contributions.

No taxes on earnings.*

No required minimum distributions (RMDs) for as long as you live.

No age limit to open the IRA or contribute to it.


Eligibility and contribution amounts could be limited by your income.

Contributions can't be deducted.

Key elements of a traditional IRA


Contributions may be tax-deductible.

Earnings grow tax-deferred.

Eligibility not limited by income.


As a result of changes made by the SECURE Act, you can make contributions to a traditional IRA for 2020 or later regardless of your age. You cannot contribute to a traditional IRA for 2019 if you reached age 70½ or older in 2019.

RMDs must start at age 72 (age 70½ if you attained age 70½ before 2020).

The CARES Act provides a temporary waiver of RMDs for 2020. If you would have had an RMD obligation for 2020, you do not have to take your RMD for 2020 if you don't want to.

If you have already taken a withdrawal in 2020 that would have represented an RMD, you may be eligible to roll the money over within 60 days, subject to IRS rollover rules (including the 60-day rollover deadline and the IRA one rollover-per-365 day rule). Distributions from inherited IRAs are not eligible to be rolled over.

Note: The IRS has extended the 60-day rollover deadline for some distributions, but not all. IRS guidance provides that if the 60-day deadline to complete a rollover ends on or after April 1, 2020, but before July 15, 2020, the rollover deadline is extended until July 15, 2020. If you take an RMD this year and want to roll all or part of the distribution back to an IRA, this extension may provide additional time to complete the rollover. (Please note that this extension does not apply if your 60-day rollover deadline would have ended prior to April 1, 2020.)

For more information about the rollover extension and waivers of the 60-day rollover requirement, go to or consult a tax advisor. It's possible the IRS may issue additional clarification in the future regarding rollovers of amounts that would have been RMDs, but for the waiver.

A portion of your withdrawals may be taxable.


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Required minimum distributions (RMDs)

Most owners of traditional IRAs and employer-sponsored retirement plan accounts (like 401(k)s and 403(b)s) must withdraw part of their tax-deferred savings each year, starting at age 72 (age 70½ if you attained age 70½ before 2020). If you withdraw less than the RMD amount, you may owe a 50% penalty tax on the difference. Roth IRAs have no RMDs during the owner's lifetime.

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Delaying the payment of income taxes on earnings generated in an investment account. For example, if you have a traditional IRA, you don't pay income taxes on the interest, dividends, or capital appreciation accumulating in the account until you begin making withdrawals.