Roth and traditional individual retirement arrangements (IRAs) are two of the most common types of retirement savings. However, they differ from each other in important ways. Each has advantages and disadvantages, depending on your individual circumstances.

The maximum total amount that you can contribute annually to a Roth and/or traditional IRA is the lesser of:

• $5,000 or your taxable compensation for the year
• $6,000 or your taxable compensation for the year if you are age 50 or older

The rules governing contributions differ for Roth and traditional IRAs.  Explore the following:

- You can establish and contribute to a Roth IRA at any age.

- You must be younger than 70½ at the end of the year to contribute to a traditional IRA.

- Whether you can contribute to a Roth IRA and how much you can contribute depend on your income and filing status.

- You can contribute to a traditional IRA regardless of your income.

- Contributions to a Roth IRA are not tax-deductible.

- Contributions to a traditional IRA may be tax-deductible, depending on your income, filing status, whether you are covered by a retirement plan through your job, and whether you are receiving Social Security benefits.

The rules governing distributions are also different for Roth and traditional IRAs:

- You are not required to take distributions from your Roth IRA, regardless of your age.

- You must begin taking the required minimum distributions from your traditional IRA by April 1 following the year in which you reach age 70½.

- Distributions from your Roth IRA are not taxed, as long as certain criteria are met.

- Distributions from your traditional IRA are taxed as ordinary income; however, if you made nondeductible contributions, not all of your distribution is taxable.

More information on Roth vs. traditional IRAs is available from IRS Publication 590.