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 | |||||||||||||||||||||||||
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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 |
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Eligibility |
For 2020 and later, no age limit on making regular contributions to traditional or Roth IRAs. 2021 tax year contributions
2022 tax year contributions
* 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. |
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Contributions taxed upon withdrawal | No | Yes, if deductible | ||||||||||||||||||||||||
Contributions deductible from income tax | No |
Contributions are tax-deductible within the following income limits*: 2021 tax year contributions
2022 tax year contributions
* Dollar figures represent Modified Adjusted Gross Income on your 1040 tax form. |
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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. |
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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).