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Retirement Account Comparison
Old 01-12-2006, 08:42 AM   #1
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Join Date: Jun 2002
Location: Texas Hill Country
Posts: 39,208
Retirement Account Comparison has a simplified comparison of the + and - of various types of retirement accounts:

Traditional IRA
May qualify for tax deduction
Can contribute up to $4,000 in 2006 ($5,000 if you're 50 and older)
Can take money out for qualified events without penalty
Taxed as income when you start taking distributions
Can start taking money regularly at 59˝
Have to start taking money out at 70˝
Can't contribute after 70˝

Roth IRA
Can contribute up to $4,000 in 2006 ($5,000 if you're 50-plus)
No tax deduction
Can take out the money you've contributed at any time without penalty
Can withdraw earnings after five years for qualified events
Money not taxed when you take it out at retirement
Don't have to take distributions at 70˝
Can contribute past 70˝
Income limit: $95,000 to $110,000 for singles; $150,000 to $160,000 for married couples

Contributions taken out of paycheck.
Can save up to $15,000 in 2006 ($20,000 if you're 50-plus)
Can retire as early as 55
Don't have to take distributions at 70˝
Can contribute past 70˝
Federally protected from creditors
Limited to the plan your employer designs/selects
May or may not be able to borrow
May or may not have matching contributions from employer
Matching may be vested

Contributions taken from paycheck.
Can contribute 100 percent of income up to $10,000
Employer matching
Immediately vested
Option for self-employed

Employees can contribute up to $44,000 in 2006
Functions like an IRA
Option for self-employed
No annual reporting
Solo 401(k) Can contribute 100 percent of income up to $15,000 in 2006 ($20,000 if you're 50-plus)
Option for self-employed
Additional paperwork and tax forms required

Bankrate goes into more detail about each type of account here:
Numbers is hard.

Retired in 2005 at age 58, no pension

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