- DIGITAL BANKING
- NORTHFIELD INVESTMENT SERVICES
|Features||Traditonal IRA||Roth IRA|
|Minimum Balance to Open||$250.00||$250.00|
|Age Requirement||Contribute up to 701/2||Contribute at any age|
|Income Limitations||None||Your income can affect how much you can contribute|
|Early Withdrawal Penatly||If you make withdrawals before you're 591/2, your might have to pay a 10% penalty.||If you make withdrawals before you're 591/2, you might have to pay taxes on your earnings plus a 10% additional tax.|
|Required Minimum Distributions (RMDs)||You must begin taking RMDs no later than April 1 of the year following the year to turn 701/2.||RMDs do not apply|
Earnings accumulate tax-deferred until withdrawn with a Traditional IRA when you make contributions (before age 701/2). What does that mean? It means your money grows and you don’t need to pay taxes on it until you take it out of the IRA. Neat, right?
With a Roth IRA, you can contribute at any age, and your money grows tax-deferred. A Roth IRA features tax credits, which means you may be eligible for a dollar-for-dollar reduction in your taxes, and you can also enjoy tax-free withdrawals (when you withdraw contributions first).(1)
Speak with a personal banker at your local branch who will give you one-on-one attention and help you decide which option works best for you.
(1) Be sure to speak to your tax advisor about your individual tax situation.