Below, I have posted the comparison between the Traditional IRA and Roth IRA. Hope it helps.

Traditional IRA Profile

• Tax deductible contributions (depending on income level)
  
• Withdraws begin at age 59 1/2 and are mandatory by 70 1/2.
  
• Taxes are paid on earnings when withdrawn from the IRA
  
• Funds can be used to purchase a variety of investments (stocks, bonds, certificates of deposits, etc.)
  
• Available to everyone; no income restrictions
  
• All funds withdrawn (including principal contributions) before 59 1/2 are subject to a 10% penalty (subject to exception).

Roth IRA Profile

• Contributions are not tax deductible
  
• No Mandatory Distribution Age
  
• All earnings and principal are 100% tax free if rules and regulations are followed
  
• Funds can be used to purchase a variety of investments (stocks, bonds, certificates of deposits, etc.)
  
• Available only to single-filers making up to $95,000 or married couples making a combined maximum of $150,000 annually.
  
• Principal contributions can be withdrawn any time without penalty (subject to some minimal conditions).

The biggest difference between the Traditional and Roth IRA is the way the U.S. Government treats the taxes. If you earn $50,000 a year and put $2,000 in a traditional IRA, you will be able to deduct the contribution from your income taxes (meaning you will only have to pay tax on $48,000 in income to the IRS). At 59 1/2, you may begin withdrawing funds but will be forced to pay taxes on all of the capital gains, interest, dividends, etc., that were earned over the past years.

On the other hand, if you put the same $2,000 in a Roth IRA, you would not receive the income tax deduction. If you needed the money in the account, you could withdraw the principal at any time (although you will pay penalties if you withdraw any of the earnings your money has made). When you reached retirement age, you would be able to withdraw all of the money 100% tax free. The Roth IRA is going to make more sense in most situations. Unfortunately, not everyone qualifies for a Roth. A personal filing their taxes as single can not make over $95,000. Married couples are better off, with a maximum income of $150,000 yearly.

谢谢斑竹。那请问你要是我们这样的情况会选择roth ira还是traditional? 我个人比较倾向于traditional.

楼主这么高的收入，是否参加了公司的401K呢？要是参加了的话，Traditional IRA的contribution就不能deduct了。

排版不是很清楚，简单改写一下：

Single：

一旦参加了单位的退休计划，AGI在$50-60K以内开始partial deduct，$60K以上不能deduct。

Married jointly：

如果双方都没有参加单位的退休计划，那么当然是可以fully deduct的。

自己参加了单位的退休计划（不论对方如何），AGI在$70-80K以内开始partial deduct，$80K以上不能deduct。

自己没有参加单位的退休计划，对方参加了，AGI在$155-165K以内开始partial deduct，$165K以上不能deduct。

楼主说Roth几乎不能放了，那么AGI应该在$150K左右了吧，，要注意参加了单位的退休计划没有哦。

[此贴子已经被作者于2006-3-12 13:40:14编辑过]

就象重雪版主说的，Roth比较灵活，所以能放Roth就先放Roth吧。不能放了就放Traditional IRA，也就是把IRA当作annuity来用了。

多谢指教。我对这方面真的不是很懂。我还以为$150k是指w2income. 一般 AGI和w2的income会差多少？

去年我们没有参加401k，所以肯定可以fully deduct的。