Choosing an IRA

If you qualify for all three types of IRAs, based on your adjusted gross income (AGI), you’ll have to choose between a traditional deductible IRA, a traditional non-deductible IRA, and a Roth IRA. Traditional deductible IRAs have the strictest AGI limits, while traditional non-deductible IRAs have none at all. Roth IRAs are in between, though the majority of workers qualify.

There are no hard and fast rules for which is the best choice, but many experts advise choosing a Roth if you qualify, because of the advantage of tax-free income.

	Roth IRA	Traditional non-deductible IRA	Traditional deductible IRA

Pros	Tax-free income No required withdrawals No age limit for contributing	Tax-deferred earnings	Tax deductible contributions Tax-deferred earnings

Cons	Contributions not deductible	Contributions not deductible Tax due at regular rates at withdrawal Required withdrawals beginning at 70 1/2	Tax due at regular rates at withdrawal Required withdrawals beginning at 70 1/2

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