ROTH IRATRADITIONAL IRA
Contribution limit
$6,500 in 2023 ($7,500 if age 50 or older).
$7,000 in 2024 ($8,000 if age 50 or older).
$6,500 in 2023 ($7,500 if age 50 or older).
$7,000 in 2024 ($8,000 if age 50 or older).
Key pros

  • Qualified withdrawals in retirement are tax-free.

  • Contributions can be withdrawn at any time.


  • If deductible, contributions reduce taxable income in the year they are made.

Key cons

  • No immediate tax benefit for contributing.

  • Ability to contribute is phased out at higher incomes.


  • Deductions may be phased out.

  • Distributions in retirement are taxed as ordinary income.

Early withdrawal rules

  • Contributions can be withdrawn at any time, tax- and penalty-free.

  • Unless you meet an exception, early withdrawals of earnings may be subject to a 10% penalty and income taxes.


  • Unless you meet an exception, early withdrawals of contributions and earnings are taxed and subject to a 10% penalty.