Traditional IRA vs Roth IRA Part #1 - Tax Deduction Traditional IRA is tax deductible Roth IRA is NOT tax deductible Part #2 - Are withdrawals taxable? Traditional IRA withdrawal is taxable. Roth IRA withdrawal is taxable. Part #3 - Contribution Limits Both Traditional and Roth IRAs 2022: $6,000 ($7,000 if you are over 50 years old) 2023: $6,500 ($7,500 if you are over 50 years old) Part #4 - Penalties Traditional IRA - 10% penalty plus you have to pay taxes on the withdrawal for any withdrawal before the age of 59 ½ Roth IRA - no penalty or taxes owed for any contributions withdrawn, but any earnings (anything over the contributions) is subject to a 10% penalty plus taxes Check out Twitter 🧵 on IRAs: To continue learning more about this subject, check out the following: Traditional IRA vs Roth IRA: What's the Difference? Learn How to Analyze Your Investment Portfolio and 401k (Stock and Bond Strategies) What are Investments: Breaking Down Investments
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