Traditional or Roth IRA?
Before making a contribution to either type of IRA it is important to understand the differences between the two. The following advantages of both are described below in general terms. Both of these IRAs are subject to specific eligibility and distribution requirements which although not described here could affect your eligibility to make contributions or affect the tax effectiveness of either IRA. If eligible, the maximum 2002 contribution for both a Roth and traditional IRA is $3,000 ($3,500 for those 50 years old or older). 2002 contributions must be made April 15, 2003. Roth IRA advantages: Roth IRAs provide tax-free growth and eligible distributions are never taxable. This makes a Roth more attractive the longer they have to grow. Roth IRAs are generally more flexible than traditional IRAs. Roth IRAs do not have a minimum age that a taxpayer must begin taking distributions or stop making distributions to their IRA. Income phaseout limits are higher for a Roth IRA than a tradition
