Which IRA is Right for Me?

The MissionSquare Roth IRA and the MissionSquare 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 2021 and 2022 tax year contributions.

You can open a Roth or traditional IRA with MissionSquare Retirement. You may make 2021 tax year contributions until the tax-filing deadline in 2022.

Roth IRA Traditional IRA
Key tax advantage Tax-free growth potential Contributions may be tax-deductible
Maximum annual contribution 2022 tax year: $6,000, or $7,000 if age 50 or older
2021 tax year: $6,000, or $7,000 if age 50 or older
Eligibility

For 2020 and later, no age limit on making regular contributions to traditional or Roth IRAs.

2021 tax year contributions

Eligibility Married Single
Full <$198,000 <$125,000
Partial $198,000–$208,000 $125,000–$140,000
None ≥$208,000 ≥$140,000

2022 tax year contributions

Eligibility Married Single
Full <$204,000 <$129,000
Partial $204,000–$214,000 $129,000–$144,000
None ≥$214,000 ≥$144,000

* Dollar figures represent Modified Adjusted Gross Income on your 1040 tax form.

Married Filing Separately (live together) <$10,000 – a reduced amount, >-$10,000 – None

Your traditional IRA contributions may be tax-deductible. The deduction may be limited if you or your spouse are covered by a retirement plan at work and your income exceeds certain levels.
Earnings grow tax-deferred Yes Yes
Earnings taxed upon withdrawal No, if held five years and you're 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
  • No retirement plan at work: Your deduction is allowed in full if you (and your spouse, if you're married) aren't covered by a retirement plan at work.
  • Retirement plan at work: Your deduction may be limited if you (or your spouse, if you're married) are covered by a retirement plan at work and your income exceeds certain levels.

Contributions are tax-deductible within the following income limits*:

2021 tax year contributions

Deductibility Married Single
Full ≤$105,000 ≤$66,000
Partial $105,000–$125,000 $66,000–$76,000
None ≥$125,000 ≥$76,000

2022 tax year contributions

Deductibility Married Single
Full ≤$109,000 ≤$68,000
Partial $109,000–$129,000 $68,000–$78,000
None ≥$129,000 ≥$78,000

* Dollar figures represent Modified Adjusted Gross Income on your 1040 tax form.

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 72 No Yes
Portability – roll-ins 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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