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business Personal FinanceIRA ABCs

Roth vs. Traditional | Age 59½ - 70½ | Early Retirement | Later Retirement

Retirement Options

Traditional vs. Roth IRA

IRAs provide a number of possibilities for withdrawing money. But the name of the game is still retirement. (Remember, IRA stands for Individual Retirement Arrangement!)

Here's a look at your options, and requirements, when you retire.

Traditional vs. Roth IRA - Distribution Options

  Traditional IRA Roth IRA
Age for withdrawing money without penalty.

59½. (Penalty may be avoided if you meet an exception.)

No minimum age for withdrawing contributions without penalty. If under 59½ you may owe tax and penalty on earnings, unless you meet an exception.

Penalty for early withdrawal

If you don't meet an exception, you owe federal income tax and a 10% penalty on deductible contributions, and earnings.

If you don't meet an exception, you owe income tax and a 10% penalty on earnings withdrawn before age 59½

Age to begin required distributions


None for Roth-holder.

Penalty for not making required minimum withdrawal

50% of the amount you should have withdrawn, but didn't.

Not applicable.

Pay taxes on distributions?

You pay income tax on deductible contributions, and on earnings.

No income tax if you take a qualified distribution.

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