CRS report discusses Roth and traditional IRAs
RL34397
Traditional and Roth Individual Retirement Accounts (IRAs): A Primer
March 03, 2003
Inresponse to concerns over the adequacy of retirement savings, Congresshas created incentives to encourage individuals to save more forretirement through a variety of retirement plans. Some retirement plansare employer-sponsored (such as 401(k) plans), and others areestablished by individual employees (such as Individual RetirementAccounts (IRAs)). This report describes the primary features of twocommon retirement savings accounts that are available to individuals.Both traditional and Roth IRAs offer tax incentives to encourageindividuals to save for retirement. Although the accounts have manyfeatures in common, they differ in some very important aspects. Thisreport explains the eligibility requirements, contribution limits, taxdeductibility of contributions, and rules for withdrawing funds fromthe accounts. This report will be updated as legislative activitywarrants.