Traditional IRA

• Anyone under age 73 for the entire tax year with earned income from compensation
• Maximum contributions $6,500 annually for tax year 2023
• “Catch-up” Contributions: Individuals age 50 and older who have earned compensation will be permitted to make additional “catch-up” contributions to Traditional and Roth IRAs. The maximum “catch-up” contribution is $1000 for tax year.

Roth IRA

• Anyone filing a Single Tax Return with MAGI* up to $138,000
• Married couples filing a Joint Tax Return with MAGI* up to $218,000
• Reduced contributions are allowed for up to $228,000 for single filers and up to $153,000 for joint filers
• May make contributions after age 73 but cannot exceed compensation
• Maximum contributions $6,500 annually
• “Catch-up” Contributions: Individuals age 50 and older who have earned compensation will be permitted to make additional “catch-up” contributions to Traditional and Roth IRAs. The maximum “catch-up” contribution is $1000 for tax year.

Traditional IRA
At age 73

Roth IRA
Not required

Traditional IRA
Withdraw penalty free without incurring 10% IRS premature-distribution penalty:

• Upon reaching age 59 1/2
• Qualified educational expenses
• First time home purchase (lifetime maximum of $10,000 per individual)
• Disability
• Catastrophic medical expenses
• Payment to beneficiaries upon the owner’s death
• Payment of health insurance premiums while unemployed for 12 weeks or longer
• Withdrawal of earnings and deductible contributions still results in taxable income.

Roth IRA

• Regular contributions can be withdrawn tax and penalty free anytime
• Earnings can be withdrawn penalty free for any of the following qualified reasons:
  • Age 59 1/2
  • Disability
  • Death
  • For first time home purchase (lifetime maximum of $10,000 per owner)
  • Education Expenses
  • Large medical expense and health insurance premium while unemployed

Traditional IRA

• A married person who is not an active participant in a retirement plan, but whose spouse is an active participant will be eligible for a fully deductible contribution to a Traditional IRA if MAGI* is under $150,000
• Earnings compound tax-deferred until withdrawn, usually out-earning taxable non-IRA investments. Earnings are then taxed when withdrawn, usually at a lower tax rate.
• Contributions may be tax deductible if certain requirements are met.

Roth IRA

• Regular contributions can be withdrawn tax and penalty free anytime
• Earnings are tax free if account is open for five years and withdrawn for one of the following qualified reasons:
  • Death
  • Disability
  • Age 59 1/2
  • First time home purchase
  • Not required to start withdrawals at age 73