With a Traditional IRA, you can defer taxes for the dividends on your contributions until they are withdrawn. Also, certain contributions are tax deductible in the tax year for which you make them.
You are eligible to establish a traditional IRA if you are younger than age 70 ½ for the entire tax year and you or your spouse currently have compensation.
The Roth IRA allows only nondeductible contributions and features tax-free withdrawals for certain distributions reasons after a five year holding period. Since Roth IRA contributions are nondeductible and taxed in the year they are earned, if you expect to be in a higher tax bracket when you retire, you may benefit more from a Roth IRA than from a traditional IRA.
You are eligible to establish a Roth IRA if you or your spouse currently have compensation and your modified adjusted gross income (MAGI) does not exceed certain prescribed limits.
USU Credit Union offers free advice from experienced financial professionals. Meet with a free financial advisor for more information on which IRA option you qualify for and what will work best with your retirement plan.