Alright, I’ll admit it, I don’t have a Roth IRA. I have a regular IRA instead. I’ve been considering jumping on the Roth bandwagon, but wanted to check things out for myself first. So I went and took a look at the IRS’s Publication 590, Individual Retirement Arrangements. Here is the chart I came up with to help me decide after checking out the details for each type of IRA in that publication:

 

QuestionRoth IRATraditional IRA
Are contributions deductible?NoPossibly
Are contributions reported on tax return?NoYes
Are distributions taxed?No, for qualified distributionsYes, but there are some exceptions
Are there penalties for early distributions?Yes, 10% for non-qualified distributionsYes, 10%
Is there a maximum contribution amount?Yes, it variesYes, it varies
IRA can be rolled over into ____?Another RothPossibly a Federal Thrift Savings Fund, section 457 plans, and section 403(b) plans
Accepts rollovers from ____?Another RothOther traditional IRAs, an employer’s qualified retirement plan, section 457 plans, and section 403 plans
Are minimum distributions required?NoYes, beginning the year you reach age 70½

 

Based on this information, it seems like the main benefit of a Roth over a traditional IRA is that you’re not taxed on distributions from the Roth. To see whether or not this would likely benefit me, I used this Roth vs Regular IRA Calculator. Unless my circumstances change significantly, at this point it looks like I will likely come out the slightest bit ahead by keeping my traditional IRA (because my marginal tax rate is likely to remain unchanged in retirement, and I meet an exception which means that not all of my distributions from my traditional IRA will be taxable.) It’s almost a wash though, which means that I may still consider switching to a Roth because there are no minimum distributions required at a certain age. Of course, this leads to more questions if I decide to switch: do I just open a new Roth, and begin contributing to it, or do I consider converting my existing IRA to a Roth, and if so, when? It looks like more research is in order.