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Compare Zecco Trading IRAs: Roth IRA vs. Traditional IRA

IRAs offer potential tax-advantaged growth of retirement savings, and Zecco Trading's no-commission IRAs permit you to choose from a variety of investments. Get 10 free stock trades every month when you maintain a $25,000 balance or execute 25 trades each month. Otherwise it's just $4.50 per trade. See details.

Not only can you open a Roth IRA and/or Traditional IRA at Zecco Trading, but you can also rollover a 401(k) retirement account to your new Roth IRA or Traditional IRA. Talk with your plan administrator for more information. To contribute to any IRA, you must have earned income equal to or greater than the contribution you'd like to make. Take a look at the chart below for more detailed information on Traditional IRAs and Roth IRAs.

Quick Overview of a Traditional IRA vs. Roth IRA
Traditional IRA Roth IRA
Contributions may be tax deductible. Contributions are not tax deductible.
Any and all contributions and earnings compound are tax-deferred until they are withdrawn at age 59 1/2 or later. Withdrawals of contributions at any age, or earnings after age 59 1/2 and after account has been open for 5 years are penalty and tax free.
Qualified distributions are considered ordinary income and are taxed at your current tax rate. Federal tax-free growth.
Required Minimum Distributions begin before April 1st of the year after you turn 70 1/2. There are no Required Minimum Distributions.
Provides flexibility in using assets immediately for qualified home purchase, college costs, or any major medical expense. After five years you may withdraw earnings for qualified expenses such as the purchase of a first home, unreimbursed major medical expenses, or college, all free of penalty.
No limits on income. Income limits apply (see below).

Maximum Contribution
The yearly maximum contribution is $5,000 in 2009 or 100% of earned income, whichever is less. If you are over age of 50, you may contribute to each IRA an additional $1,000 of earned income. Consult the IRS website to calculate maximum contributions.

401(k) Rollover Eligibility
Balances in 401(k) or other employer-sponsored retirement plans may be rolled over to a Roth IRA or Traditional IRA.

Still Having difficulty deciding between a Roth IRA and Traditional IRA?
Compare these detailed differences and choose the IRA that's right for you. There are significant differences when comparing the IRAs, especially with regard to income limits and tax benefits.

Detailed Overview of Traditional IRA vs. Roth IRA
Traditional IRA Roth IRA
Eligibility:

You must be between the ages of 18 and 70 1/2 and have earned income equal to or greater than your IRA contribution amount.

Income limits are not applicable to Traditional IRAs. However, your contributions may not be deductible.

You must be age 18 or older and meet one of these Adjusted Gross Income (aka AGI) qualifications:

Single, head of household or married filing separately and you did not live with your spouse at any time during 2008:

  • If your AGI was less than $101,000 you qualify for a full contribution.
  • AGI from $101,000-$116,000 you are eligible for a partial contribution.

Married, filing joint or qualified widow(er):

  • If your AGI is less than $159,000 you qualify for a full contribution.
  • If your AGI is from $159,000-$169,000 you are eligible for a partial contribution.

Married, filing separately but lived with spouse for part of 2008:

  • If your AGI was less than $10,000 you qualify for a full contribution.
Contributions and Tax Deductions:
Contributions may be deductible from your gross income tax return for the year in which the contributions are made.* Contributions are made on an after-tax basis and are not deductible.
Federal Income Tax Treatment:
Earnings grow on a tax-deferred basis. Deductible contributions and earnings are subject to federal income tax when withdrawn. Earnings accrue free from federal taxes. You won't receive a tax deduction now but you won't have to pay taxes on earnings for qualified distributions.
Penalties for Withdrawal:
You can withdraw or use your traditional IRA assets at any time. However, a 10% additional tax generally applies if you withdraw or use IRA assets before you are age 59 1/2. Consult the IRS IRA website for more information. If you withdraw funds from your Roth IRA in less than 5 years or before you reach 59 1/2 (whichever is longer) you could incur penalties. Consult the IRS IRA website for more information.
*Talk to your tax advisor or refer to the IRA website to determine if you qualify for tax-deductibility or contributions.

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More details about online investing and trading stocks with Zecco Trading:


Zecco Trading has reconstructed the mold of options trading and stock trading online, making it easier than ever for you to get smart and act smart with your money. Need to sell stock or buy stock online, interested in penny stocks? At Zecco Trading, get 10 free stock trades every month when you maintain a $25,000 balance or execute 25 trades each month. Otherwise it's just $4.50 per trade. Free Online Stock Trading Details. Where else will you find a discount broker who looks out for your best interest by providing you free online stock trading and a community of investors to share ideas with?

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Zecco.com is a financial portal of Zecco Holdings, Inc., which also provides access to Zecco Trading, Inc.'s trading service. Zecco Holdings, inc. is not a securities broker/dealer. All securities and investments are offered to self-directed investors by Zecco Trading, Inc. Member FINRA /SIPC. More information is located on the disclosures page.

At Zecco Trading, get 10 free stock trades every month when you maintain a $25,000 balance or execute 25 trades each month. Otherwise it's just $4.50 per trade. Free Online Stock Trading Details. Options trades are $4.50 plus $.50 per contract. Only the first account of any account type is eligible for the Zecco Trading, Free Trading program. Any multiple accounts of the same type with the same registration are not eligible for the free trading program. Free Trading Program is only available through Zecco.com. $0 minimum to open cash and IRA accounts.

* Margin accounts require a $2,000 minimum balance for opening and trading on margin. Margin trading involves risks and is not suitable for all accounts.

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