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Comparing IRA Options


Who can contribute? How much can I contribute? Who can make deductible contributions? What are the tax advantages? When can I withdraw without restrictions?
Traditional IRA Anyone under age 70 1/2 who has income from compensation (or who is filing jointly with a spouse who earns compensation)

Anyone who has received a distribution from a qualified retirement plan and decides to roll over the proceeds of the plan into an IRA
  • $5,500 for 2013
  • $5,500 for 2014

    For owners age 50 and older, you have higher limits:

  • $6,500 for 2013
  • $6,500 for 2014

    Restrictions:
  • Cannot exceed compensation
  • Reduces contributions that can be made to Roth IRAs
  • Fully-deductible contributions:
  • Single individuals not active in employer retirement plans
  • Single individuals active in employer retirement plans with MAGI* of less than $59,000 for 2013, and $60,000 for 2014
  • Married couples with neither spouse active in an employer retirement plan
  • Married individuals active in employer retirement plans with joint tax returns showing MAGI* of less than $95,000 for 2013 (less than $96,000 for 2014)
  • Married individuals not active in employer retirement plans with spouses who are, as long as MAGI* is $178,000 or less for 2013 ($181,000 or less for 2014)

     

  • Earnings grow tax-deferred until withdrawn
  • Contributions may be tax-deductible
  • Withdraw penalty-free for any of the following reasons:
  • Qualified higher-education expenses
  • First-time home purchase**
  • Age 59
  • Disability
  • Qualifying medical expenses exceeding 7.5% of adjusted gross income
  • Payment to beneficiaries upon the owner's death
  • Payment of health insurance premiums while unemployed for 12 weeks or longer
  • Roth IRA
  • Anyone who has income from compensation (or who is filing jointly with a spouse who earns compensation) with the following MAGI:*
    - Up to $112,000 (single filers for 2013)
    - Up to $114,000 (single filers for 2014)
    - Up to $178,000 (joint filers in 2013)
    - Up to $181,000 (joint filers in 2014)

  • Reduced contributions allowed for higher incomes:
    - Up to $127,000 (single filers in 2013)
    - Up to $129,000 (single filers in 2014)
    - Up to $188,000 (joint filers in 2013)
    - Up to $191,000 (joint filers in 2014)

  • Persons who are married and filing separately with incomes:
    - Up to $10,000

  • $5,500 for 2013
  • $5,500 for 2014

    For owners age 50 and older, you have higher limits:

  • $6,500 for 2013
  • $6,500 for 2014

    Restrictions:
  • Cannot exceed compensation
  • Reduces contributions that can be made to traditional IRAs
  • No one can deduct contributions
  • Earnings are tax-free if account is open for five tax years and withdrawn for a qualified reason (age 59, disability, death or a first-time home purchase**)
  • Not required to start withdrawals at age 70 1/2
  • Regular contributions can be withdrawn tax-free and penalty-free at any time
  • After the account has been open five tax years, earnings can be withdrawn tax-free and penalty-free for any of these reasons: age 59, disability, death, or a first-time home purchase**
  • * MAGI - modified adjusted gross income from the federal tax form
    ** Lifetime limit for exemption on a first-time home purchase is $10,000

    Not intended as tax advice. Please consult a tax professional.

    Revised 11/4/2013

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    Your savings federally insured to at least $250,000 through the National Credit Union Administration (a U.S. Government Agency) and backed by the full faith and credit of the United States Government.
    Your savings federally insured to at least $250,000 through the National Credit Union Administration (a U.S. Government Agency) and backed by the full faith and credit of the United States Government.
    University Credit Union is an Equal Housing Lender.
    University Credit Union is an Equal Housing Lender.

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