Individual Retirement Accounts (IRAs) | American Bankers Association

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Category	Traditional IRA	Roth IRA
Qualifications	Must have earned income. There are no age restrictions.	Must have earned income. There are no age restrictions.
Maximum Contributions	Taxable years beginning in 2024 and after — $7,000*	Taxable years beginning in 2024 and after — $7,000*
Catch-Up (50+)	2024 and after $1,000*	2024 and after $1,000*
Tax Status of Earnings	Tax-deferred until withdrawal	Not taxed. Earnings grow tax-free
Contribution Restrictions (based on adjusted gross income)	Yes, if active participant in employer retirement plan. Contribution phase-outs for 2024 tax years. Singles: $73,000 - $83,000; Married joint: $116,000 - $136,000	Contribution phase-outs for 2024 tax year. Singles: $146,000 - $161,000; Married joint: $230,000 - $240,000
Tax Deduction	Yes. Contributions up to the limit are fully tax deductible if you are not an active participant in a retirement plan. Otherwise phase-out rules apply	No. These are after-tax dollars.
Penalties for Early Withdrawal	None if: Over 59 1/2 Death or disability Qualified medical expense Certain health insurance Qualified higher education expenses Qualified 1st time home purchase (up to $10,000) Due to IRS levy Qualified disaster-related expenses Expenses from birth or adoption of a child (up to $5,000) Substantially equal periodic payments over life expectancy (annuity payments) Until December 31, 2020, Coronavirus-related distributions up to $100,000 (as allowed in the Coronavirus Aid, Relief, and Economic Security Act (CARES Act)).	None if made after a 5-year period and: Over 59 1/2 Death or disability Qualified medical expense Certain health insurance Qualified medical expense Qualified 1st time home purchase (up to $10,000) Due to IRS levy Qualified disaster-related expenses Expenses from birth or adoption of a child (up to $5,000) Substantially equal periodic payments over life expectancy (annuity payments) Until December 31, 2020, Coronavirus-related distributions up to $100,000 (as allowed in the Coronavirus Aid, Relief, and Economic Security Act (CARES Act)).
Required Distributions	Generally, must begin by April following year participants turns 72 (as of January 1, 2024).	Only after death of participant

* To be adjusted annually for inflation in $500 increments

References

Three things to consider when using an IRA

Contribution deadlines: IRAs must be opened and/or funded by the April 15 tax-filing deadline to receive tax deductions.
Catch-up contributions: Individuals who have reached age 50 by the end of the year will be able to make additional catch-up contributions of $1,000 per year.
Saving at tax time: Have part of your federal-tax refund deposited directly into your IRA.

Remember

Retirement Savings Accounts invested in deposit accounts are insured up to $250,000 per account owner at FDIC-insured deposit institutions.