Traditional and Roth IRA Comparison Chart Marion Center Bank

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Account Type	Traditional IRA	Roth IRA
Account Type Benefits	Traditional IRA Worry-free savings with tax-deferred earnings, plus tax-deductible contributions Retirement earnings are 100% free from federal income tax until you take distributions Gives flexibility to easily move funds if your investment goals change Call today and let us help you start saving for your retirement!	Roth IRA Provided certain guidelines are followed, every dollar invested grows tax-free and is distributed back to you tax-free Funds are always available if at any time you need to take a withdrawal No age mandated distribution requirement which means more flexibility to plan Call today and let us help you start saving for your retirement!
Account Type What is it?	Traditional IRA A personal tax-favored savings account that allows for tax-deductible contributions for most people. Earnings are not taxed until you begin to withdraw from your Traditional IRA.	Roth IRA While contributions to your Roth IRA are not tax deductible, the best part is what happens when you withdrawal from the account. Provided certain conditions are met, withdrawals are tax-free and penalty-free.
Account Type Who is eligible to contribute?	Traditional IRA An individual who has earned income is eligible to contribute. You are permitted to participate in another retirement plan, such as one sponsored where you work. For married couples, you and your spouse may each have your own IRA; however, you may not have a joint IRA.	Roth IRA An individual who has taxable compensation, or is married filing jointly and his or her spouse has taxable compensation, there is no age limit for contributing. Income limits apply.
Account Type How much can I contribute?	Traditional IRA For 2026, the contribution limit is $7,500 if you are under age 50, and $8,600 if you are age 50 and older. Call for information on additional guidelines and requirements.	Roth IRA For 2026, the contribution limit is $7,500 if you are under age 50, and $8,600 if you are age 50 and older. Call for information on additional guidelines and requirements.
Account Type When can I make contributions?	Traditional IRA Contributions for a year may be made up to the tax-filing deadline (usually April 15th) for that year, not including extensions.	Roth IRA Contributions for a year may be made up to the tax-filing deadline (usually April 15th) for that year, not including extensions. Remember, there is no maximum age limit; if you are working, contributions can be made for the year.
Account Type Are contributions tax deductible?	Traditional IRA Your contributions are fully deductible if, for the year you contribute, you (you and your spouse, if married) do not actively participate in a retirement plan at work; however, you (or your spouse) may be eligible for either a full or a partial deduction based on your tax-filing status and income. If your income exceeds the limits set for that year, no deduction will be allowed.	Roth IRA Never is federal income tax deductible however; you can convert all or part of your Traditional IRA or workplace retirement plan (WRP) to a Roth IRA. Call for more details.
Account Type Are distributions subject to IRS 10% early distribution penalty?	Traditional IRA The taxable portion is subject to the IRA 10% early distribution penalty, unless the individual is age 59½ or older, or an exception applies.	Roth IRA Same as Traditional, except conversion funds that are distributed within five years are also subject to the IRS 10% penalty, unless the individual is age 59½ or older, or an exception to the penalty applies
Account Type When must distributions begin?	Traditional IRA Contact our IRA Department for the most current information concerning Required Minimum Distribution (RMD) dates.	Roth IRA Not required during the owner’s lifetime but can be taken out at anytime.