Contributions

• Contributions made to a Roth IRA do not allow you to take a deduction on your income taxes. Traditional IRA contributions allow you to write off the amount of the contribution from your income taxes as an adjustment to income. Because the deduction is an adjustment to income, you do not have to itemize your deductions to claim your traditional IRA contributions. Contributions to either a Roth IRA or a traditional IRA qualify you for the retirement savings credit.
  
  

Qualified Withdrawal Criteria

• Roth IRAs require two criteria to be met: At least five tax-years must have elapsed since your first contribution, and you must either be at least 59 1/2 years old, taking out no more than $10,000 for a first-time home purchase or permanently disabled. When you take a qualified withdrawal from your Roth IRA, you do not pay any income taxes on the distribution. With a traditional IRA, the requirement for qualified withdrawals is much simpler: You must be at least age 59 1/2 when you take the distribution. When you take a qualified distribution from a traditional IRA, you must include the amount as a taxable distribution.
  
  

Early Distribution Function

• With a traditional IRA, all early distributions (withdrawals taken before age 59 1/2) are subject to taxes and, unless an early withdrawal exception applies, a 10 percent early distribution penalty. With a Roth IRA, you can remove your contributions from the account tax-free and penalty-free. However, once you take out all the contributions, any earnings withdrawn receive the same treatment as traditional IRA early withdrawals: The earnings count as taxable income, and a 10 percent early withdrawal penalty applies unless you have an exception. Exceptions to the early withdrawal penalty are the same for both traditional and Roth IRAs and include medical expenses over 7.5 percent of your adjusted gross income, permanent disabilities and college costs.
  
  

Mandatory Withdrawal Comparison

• Traditional IRAs require that you start taking mandatory minimum distributions (RMDs) from the account during the calendar year you turn 70 1/2 years old. The size of the withdrawal depends on your age and account value: The older you are and the more money there is in the traditional IRA, the more you have to take out. These distributions must occur even if you are still working. Conversely, you are never required to withdraw money from a Roth IRA, no matter how old you are.