April 28, 2018
The two main types of IRAs that can help you save for retirement are Traditional and Roth.
What's the same
Contribution limits – $5,500 (age 49 and under); $6,500 age 50 and older
Contribution deadline – Tuesday, April 17, 2018 (for the 2017 tax year)
Minimum investments – No minimum to open a Fidelity IRA
Fees – No setup or maintenance fees; no transaction fees for most Fidelity mutual funds
Note: A Rollover IRA is a Traditional IRA often used for rollovers from an old workplace plan, such as a 401(k).
Roth IRA: Tax-free growth and tax-free qualified withdrawals.
Traditional IRA: Tax-deferred growth and tax-deductible contributions.
Roth IRA: Contribute at any age.
Traditional IRA: Contribute until you're 70½.
Roth IRA: You won't pay taxes when you withdraw your contributions, and you won't pay federal taxes on your earnings, as long as the five-year aging requirement has been met.
Traditional IRA: You will pay taxes when you withdraw your pre-tax contributions and when you withdraw any earnings.
Roth IRA: If you make withdrawals before you're 59½, you might have to pay taxes on your earnings plus a 10% additional tax.
Traditional IRA: If you make withdrawals before you're 59½, you might have to pay a 10% penalty.
Required minimum distributions (RMDs)
Roth IRA: RMDs do not apply during your lifetime.
Traditional IRA: RMDs must be taken starting in the year you turn 70½.
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