There are two types of IRA’s, Roth and Traditional.  Both types help you save for retirement and offer tax benefits. 

Roth IRA’s offer federally tax-free growth and penalty free withdrawals (restrictions for withdrawals apply).  There are income and eligibility requirements.  There are no age restrictions on a Roth IRA as long as you are receiving compensation from employment.  You can contribute to both a 401(k) and an IRA.  A non-working spouse can open a Roth IRA if they file a joint federal income tax return (contribution limits apply).  A Roth IRA has income limits for making a contribution.  Individuals age 50 or older (in the calendar year of their contribution) can make catch-up contributions of an additional $1000 per year. 

Traditional IRA’s may allow you to deduct your contributions on your income taxes now and defer the taxes until you make qualified withdrawals when you retire.  There are no income eligibility limitations.  Individuals under age 70 ½ who receive employment compensation are eligible to contribute to a traditional IRA.  You can contribute to both a 401(k) and an IRA.  Individuals age 50 or older (in the calendar year of their contribution) can make catch-up contributions of an additional $1000 per year.