Compare IRAs

American Century Investments® offers different IRA types designed to help investors like you save for a secure retirement. Find out the benefits of each and use our IRA calculators to decide which might be right for you.

  • IRA Benefits
  • Traditional vs. Roth IRAs

IRAs Can Help You Save Money for Retirement and Before

IRAs were designed to help investors save for retirement while gaining tax and other benefits along the way. Whether you choose a Traditional IRA or a Roth IRA, you'll find each offers advantages before and after you retire. These benefits are the same if you choose one of our Brokerage IRAs.

Traditional IRAs Offer Tax Benefits Now and Later

Traditional IRAs work well for some investors because the contributions are generally tax deductible. Here are some reasons why investing in a Traditional IRA may make sense.

Tax-Deductible Contributions

Tax-Deferred Earnings

Multiple Uses

Roth IRAs Offer Tax-Free Earnings and Flexibility

Roth IRA contributions, are never tax deductible.1,2 But, there are other benefits, both before and after retirement, that may make this the right IRA for you.

Tax-Free Earnings

Multiple Uses

No Required Minimum Distributions

No Income Tax for Your Beneficiaries

Compare Traditional and Roth IRAs

Traditional IRA

Advantages

You may be able to deduct some or all of your contributions, including catch-up contributions, depending on your income, filing status and participation in an employer-sponsored retirement plan.

Eligibility

You must be under the age of 70½ on December 31. You or your spouse (if one of you are not working and you file a joint return) must have earned income during the year. No Modified Adjusted Gross Income (MAGI)3 limit for contributions; MAGI limits do apply to tax deductibility.

Withdrawals

A 10% early withdrawal penalty tax may apply for withdrawals prior to age 59½. Withdrawals for special purposes may be permitted prior to retirement.

Distributions

Minimum distributions are required to begin at age 70½.

Deductions Allowed

Deductibility depends on MAGI3 and whether you or your spouse is covered by an employer-sponsored retirement plan. You must figure your deduction and your spouse's deduction separately. The deduction for contributions to Traditional IRAs phases out over the following MAGI levels. (See lists below.)

Roth IRA

Advantages

You may withdraw contributions tax free and penalty free at any time.1 There is no required minimum distribution at age 70½. You may contribute to a Roth IRA as long as you want, provided you have earned income. The beneficiaries of your Roth IRA will not have to pay income tax on the assets in your account if it was open for at least five years.1,2

Eligibility

You must have earned income. Modified Adjusted Gross Income (MAGI)3 Limits: $186,000 for couples, $118,000 for singles for 2017; $189,000 for couples, $120,000 for singles for 2018. Eligibility phases out at $196,000 for couples, $133,000 for singles for 2017; $199,000 for couples, $135,000 for singles for 2018.

Withdrawals

Tax-free, penalty-free withdrawals are allowed if you are at least age 59½ and the account is at least five years old.1 Withdrawals for special purposes may be permitted prior to retirement.

Distributions

Minimum distributions are not required at any age. However, if your estate includes Roth IRA assets after your death, your beneficiaries will have to take required minimum distributions.

Deductions Allowed

Deductions on contributions are not available.

Other Deductions Allowed

Deductible Traditional IRA Phaseouts (Does not apply to Roth IRA)

Covered by Employer Plan

When Filing Status is Single
  • 2017: $62,000-$72,000
  • 2018: $63,000-$73,000
When Filing Status is Married Filing Jointly
  • 2017: $99,000-$119,000
  • 2018: $101,000-$121,000

Not covered by Employer Plan

When Filing Status Single or married filing jointly with a spouse who also is not covered
  • 2017: No Limit
  • 2018: No Limit
When Filing Status is Married filing jointly with a spouse who is covered
  • 2017: $186,000-$196,000
  • 2018: $189,000-$199,000

Annual Contribution Limits

Regular Contributions

Traditional IRA

Filing Status, Single
  • 2017: $5,500
  • 2018: $5,500
Filing Status, Married Filing Jointly
  • 2017: $11,000
  • 2018: $11,000

Roth IRA

Filing Status, Single
  • 2017: $5,500
  • 2018: $5,500
Filing Status, Married Filing Jointly
  • 2017: $11,000
  • 2018: $11,000

Catch-Up Contributions (age 50 or older)

Traditional IRA

Filing Status, Single
  • 2017: $1,000
  • 2018: $1,000
Filing Status, Married Filing Jointly
  • 2017: $2,000
  • 2018: $2,000

Roth IRA

Filing Status, Single
  • 2017: $1,000
  • 2018: $1,000
Filing Status, Married Filing Jointly
  • 2017: $2,000
  • 2018: $2,000

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1 State and local taxes may apply.
2 Estate tax may apply.
3 Modified Adjusted Gross Income (MAGI) is your Adjusted Gross Income (AGI) with standard deductions included.

IRS Circular 230 Disclosure: American Century Companies, Inc. and its affiliates do not provide tax advice. Accordingly, any discussion of U.S. tax matters contained herein (including any attachments) is not intended or written to be used, and cannot be used, in connection with the promotion, marketing or recommendation by anyone unaffiliated with American Century Companies, Inc. of any of the matters addressed herein or for the purpose of avoiding U.S. tax-related penalties.

This information is for educational purposes only and is not intended as tax advice. Please consult your tax advisor for more detailed information or for advice regarding your individual situation.

This information is for educational purposes only and is not intended as a personalized recommendation or fiduciary advice. There are different options available for your retirement plan investments. You should consider all options before making a decision. Our representatives can help you evaluate all of your distribution options.