IRA Comparison Table

Use this table to see a side-by-side comparison of traditional and Roth IRA features and benefits.

This table will help you compare the key features of benefits of traditional and Roth IRAs.


Traditional IRAs

Roth IRAs

Eligibility* †

You (or your spouse if filing a joint return) can contribute if you have taxable compensation (a salaried job, investments or other sources).

Prior to January 1, 2020, you couldn't contribute if you were age 70½ or older.

You (or your spouse if filing a joint return) can contribute if you have taxable compensation and your income level is under certain limits.

For 2020:

Single filer with MAGI of:

  • $124,000 or less — full contribution

  • $124,001–$138,999 — partial contribution

  • $139,000 or more — not eligible

Joint filers with MAGI of:

  • $196,000 or less — full contribution

  • $196,001–$205,999 — partial contribution

  • $206,000 or more — not eligible

Married, filing separately with MAGI of:

  • $0–$9,999 — partial contribution

  • $10,000 or more — not eligible

Maximum Annual Contribution

The total contribution you can make to all of your IRAs for 2020 is $6,000 or 100% of your compensation, whichever is less.

If you’re age 50 or older, you can make an additional contribution of $1,000, for a total of $7,000.

Same as traditional IRA, subject to phase-out range depending on MAGI as explained in Eligibility.

Deductible Contributions

For 2020:

Single filer, covered by a retirement plan at work, with MAGI of:

  • $65,000 or less — fully deductible

  • $65,001–$74,999 — partially deductible

  • $75,000 or more — nondeductible

Single filer, not covered by a plan at work:

  • fully deductible

Joint filer, covered by a plan at work, with MAGI of:

  • $104,000 or less — fully deductible

  • $104,001–$123,999 — partially deductible

  • $124,000 or more — nondeductible

Joint filer, only a spouse is covered by a plan at work, with MAGI of:

  • $196,000 or less — fully deductible

  • $196,001–$205,999 — partially deductible

  • $206,000 or more — nondeductible

Married, filing separately with MAGI of:

  • $0–$9,999 — partial contribution

  • $10,000 or more — not eligible

Roth contributions are not tax-deductible.

Tax Credit for Contributions

You can claim a nonrefundable tax credit for contributions if you are eligible.

The maximum credit allowed is 50% of the annual contribution amount up to $2,000, so long as your household income doesn’t exceed certain limits.

Joint filers with a MAGI of $65,000 or less in 2020 and single filers with a MAGI of $32,500 or less in 2020 qualify for the credit.

Same as traditional IRA..

Federal Income-Tax Treatment on Contributions

Taxes are deferred until distributions are made; taxable distributions are treated as ordinary income.

 Withdrawals of nondeductible contributions are not taxed.

Contributions are made with after-tax money; therefore, withdrawals from the contribution amount (basis amount) are tax-free.

Federal Income-Tax Treatment on Earnings

Earnings grow tax-deferred until distributions begin. Distributions are taxed as ordinary income.

Qualified distributions are tax-free.

Nonqualified distributions:
earnings are taxed as ordinary income and may be subject to a penalty.

earnings are tax-free after the conversion amount satisfies the five-year investment period.


Conversion to a Roth IRA**:
allowed, regardless of MAGI or tax filing status. The taxable portion of the converted amount will be treated as taxable income.


  • Investors can't recharacterize (undo) Roth conversions that occurred on or after January 1, 2018.


To employer-sponsored plans: pretax contributions can be rolled over to a 401(k) or to another qualified plan, as well as to 403(b) and 457(b) plans. However, the receiving plan must accept IRA rollovers.

From employer-sponsored plans:
eligible pretax and after-tax distributions from qualified plans, as well as from 403(b) and 457(b) plans, can be rolled over.

From/to another Roth IRA: allowed.

From employer-sponsored plans: eligible Roth contributions and earnings in 401(k) and 403(b) plans can be rolled over. In addition, non-Roth balances can be rolled over. (See Conversions for more information.)


Distributions from contributions and earnings can be taken after age 59½ without federal tax penalty.

Mandatory withdrawals must begin no later than April 1 following the year you reach age 72.‡‡

Distributions before age 59½ are subject to a 10% penalty tax unless you qualify for one of the following exceptions under section 72(t) of the Internal Revenue Code:

  • you’re disabled

  • you’re taking substantially equal periodic payments

  • the distribution is for certain medical bills

  • the distribution is used for health insurance premiums during unemployment lasting at least 12 weeks

  • the distribution is for post-secondary education expenses

  • the distribution is used to purchase a first home (up to $10,000 lifetime maximum)

Effective for distributions made after December 31, 2019, certain distributions related to the birth or adoption of a child are exempt from the 10% early withdrawal penalty.

  • Qualified withdrawals are limited to $5000, in aggregate across an individual's accounts per birth or adoption

  • The withdrawal must be made within one year after the birth or adoption date

  • Subject to certain requirements including timing, these distributions may be repaid to a plan or IRA; though interested individuals should consider waiting for future IRS guidance that explain the exact timing rules for the repayment.

Distributions to your beneficiaries are also exempt from the 10% penalty.

Distributions from contributions can be made any time without taxes or federal tax penalty.

Distributions from earnings are tax-free if your initial contribution to the account was made at least five years ago and you meet one of the following conditions:

  • you’re age 59½

  • you’re disabled

  • you’re purchasing a first home (up to $10,000 lifetime maximum)

Payments made to your beneficiaries after the five-year period are also tax and penalty free. Payments made before the end of the five-year period are penalty free.

Distributions from earnings are not subject to the 10% penalty as long as you qualify for an exception — same as exceptions for traditional IRAs.

Distributions from a conversion amount must satisfy a five-year investment period to avoid the 10% penalty. This pertains only to the conversion amount that was treated as income for tax purposes.

Required Minimum Distributions (RMDs)

You must begin taking RMDs no later than April 1 of the year following the year you turn 72‡‡.

All of your IRA balances are aggregated for the purposes of calculating RMDs. Withdrawals may be taken from one or more IRAs.

No RMDs apply during your lifetime.

* If you are eligible, you can contribute to both a traditional and Roth IRA as long as the combined amount does not exceed the applicable contribution limits shown in the table.

 Your MAGI is calculated by subtracting certain expenses and allowable adjustments from your gross income. To determine your MAGI, contact your tax advisor or financial professional.

 Future contribution limits may be adjusted for cost-of-living increases. Contributions for the current tax year must be made by April 15 of the following year, unless that date falls on a Saturday or Sunday.

** Converting to a Roth IRA is a taxable event, and the rules and tax calculations can be complicated. State income-tax rules for conversions may differ from federal rules. We encourage you to discuss conversion options with your tax advisor or financial professional.

†† For beneficiaries, distribution rules vary depending on your age at death and the beneficiary‘s relationship to you. For help with distributions and tax-related issues, we encourageyou to talk to your personal tax advisor or legal professional.

‡‡ The SECURE Act increased the age when required minimum distributions (RMDs) must begin from 70½ to 72, effective for individuals turning 70½ on or after January 1, 2020. If you reached age 70½ before this date, you are still required to take RMDs.

You can learn more about traditional and Roth IRAs in IRS Publication 590-A, Contributions to Individual Retirement Arrangements (IRAs), and IRS Publication 590-B, Distributions from Individual Retirement Arrangements (IRAs). We also encourage you to discuss your financial goals, eligibility and individual tax situation with your tax advisor or financial professional.

Related Products

Learn about the IRAs available through American Funds.

Other Resources

Learn more about the differences between Roth and traditional IRAs.

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