Traditional IRA:
· This type of account may qualify as a deductible contribution for tax purposes.
· If you are younger than 50 years of age, you can contribute up to $5,000 per year.
· If you are 50 or older, you can contribute up to $6,000 per year.
· In a traditional IRA the earnings grow tax deferred, which means that the growth (when distributed) will be taxed at the rate you may fall under at the time.
· When the account holder turns 70 ½ years of age, it is required he/she takes a required minimum distribution.
· Distributions can be taken as early as 59 ½ years of age without penalty.
ROTH IRA:
· Contributions to this account are not tax deductible.
· If you are younger than 50 years of age, you can contribute up to $5,000 per year.
· If you are 50 or older, you can contribute up to $6,000 per year.
· Earnings on a ROTH IRA are tax exempt (a.k.a. Tax Free).
· No minimum distributions are required at age 70 ½.
There are more Pros and Cons that need to be taken into consideration. Please contact alberto@cristanchoandassociates.com for more information.
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