- In 2011, the contribution limits for both traditional and Roth IRAs are $5,000 if you are under 50 years old and $6,000 if you are 50 years old or older as of the end of 2011. If you have both a traditional IRA and a Roth IRA, your combined contributions to each of the IRAs cannot exceed these limits.
- You can contribute to a traditional IRA if you have earned income during the tax year and you are under the age of 70 1/2 as of the end of the year. If you have a company sponsored retirement plan, you are still eligible to contribute to a traditional IRA with the caveat that the entire contribution may not be tax deductible.
- There are earnings caps that must be met in order to qualify to contribute to a Roth IRA. If you are married and filing your taxes jointly, you can only contribute to a Roth IRA if your adjusted gross income is less than $179,000. If you are married, live with your spouse and file separately, the maximum AGI with which you can contribute to a Roth IRA is $100,000. If you are single, then the maximum AGI is $122,000. If your income prohibits you from contributing to a Roth IRA, you can contribute to a traditional IRA.
- The IRS requires an annual minimum distribution from a traditional IRA starting on April 1 after you reach age 70 1/2. If you do not take this minimum annual distribution, you can face a tax of up to 50 percent of the required minimum distribution. Unlike traditional IRAs, there is not a minimum distribution requirement for Roth IRAs.
Contribution Limits
Basic Traditional IRA Contribution Requirements
Basic Roth IRA Contribution Requirements
Minimum Distribution From an IRA
Source...