Which IRA is Right for Me?

The Vantagepoint Roth IRA and the Vantagepoint Traditional IRA can both help you address financial needs but their tax rules differ significantly. A Roth IRA provides potentially tax-free earnings while you may receive a tax deduction for contributions to a Traditional IRA. The table below compares the two types, including IRS limits for both 2015 and 2016 tax-year contributions.

You can open a Roth or Traditional IRA with ICMA-RC. You may make 2015 tax-year contributions until the tax-filing deadline in April 2016. 

Roth IRATraditional IRA
Key tax advantage Tax-free growth potential Contributions may be tax deductible
Maximum Annual Contribution

2015 tax year: $5,500, or $6,500 if age 50 or over
2016 tax year: $5,500, or $6,500 if age 50 or over

Eligibility No age requirement; any individual with earned income within the following guidelines*:

2016 tax-year contributions
EligibilityMarriedSingle
Full <$184,000 <$117,000
Partial $184,000- $193,999 $117,000- $131,999
None ≥$194,000 ≥$132,000

2015 tax-year contributions
EligibilityMarriedSingle
Full <$183,000 <$116,000
Partial $183,000- $192,999 $116,000- $130,999
None ≥$193,000 ≥$131,000

*Dollar figures represent Modified Adjusted Gross Income, on your 1040 tax form
Anyone with earned income from wages or salary under the age of 70½ (on December 31 of the year).
Earnings grow tax-deferred Yes Yes
Earnings taxed upon withdrawal No, if held five years and you are 59½ or older or due to qualifying “first-time” home purchase, disability, or death. Yes
Earning subject to penalty tax

No, if you are 59½ or older, or qualify for an exception.

Contributions taxed upon withdrawal No Yes, if deductible
Contributions deductible from income tax No Contributions are tax deductible within the following income limits*:

2016 tax-year contributions
DeductibilityMarriedSingle
Full ≤$98,000 ≤$61,000
Partial $98,001- $117,999 $61,001- $70,999
None ≥$118,000 ≥$71,000

2015 tax-year contributions
DeductibilityMarriedSingle
Full ≤$98,000 ≤$61,000
Partial $98,001- $117,999 $61,001- $70,999
None ≥$118,000 ≥$71,000
Contributions eligible for tax credit

A tax credit of as much as $1,000 is available to low- and middle-income savers who contribute to an IRA. View the IRS website for more information.

Subject to IRS required minimum distributions after age 70½ No Yes
Contributions allowed after age 70½ Yes No. Contributions may not be made beginning in the year you turn age 70½.
Portability – rollovers and transfers between accounts

You may generally move money from employer-sponsored retirement plans (401, 403(b), 457) and other IRA accounts to a Traditional IRA without tax consequences.

Assets moved ("converted") from retirement accounts to a Roth IRA are subject to tax, but future earnings may be tax-free.

For more information about IRS rules, view IRS Publication 590 (www.irs.gov).

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