Both the Roth and IRA have unique benefits stemming from differences in how they operate. For any person considering opening a retirement account, there are several characteristics of each of the two options. Neither choice is necessarily wrong, as saving for retirement is a very wise and financially prudent decision. However, either the IRA or the Roth retirement account with be better suited to you as an individual.

To begin identifying which type of account is your best choice, there are four questions you should ask yourself. First, you need to answer how old you are. This is the first question to help you determine if the Roth or IRA is better suited for you. If over the age of 50, Roth allows for an additional contribution of $1000 annually to “catch up.” If you are over the age of 70.5 years, you can no longer make any contributions to a traditional IRA.

The second question needing an answer is your marital status. Are you married filing jointly, married filing separately, or do you fall under the category of single, or head of household. If you are married and filing separately and have an annual adjusted gross income over $10,000 you may potentially be ineligible for even contributing to a Roth account or you may not be able to deduct your contribution to an IRA at tax time.

For answers to those questions, you should consult a professional. Additionally, if you are a same-sex couple, it is most likely at this time would fall under the category of single or head of household. Consult a professional for a thorough determination if this case applies to your circumstances. Your marital status affects your contribution amounts for both the Roth and traditional IRA. Additionally, marital status may affect your eligibility for a Roth retirement account.

The third question needing an answer is what exactly is your adjusted gross income if you are married. At least one individual in a marital arrangement must have earned taxable income to contribute to a traditional IRA. Also, your adjusted gross income can in some instances affect your ability to contribute to a Roth retirement account, or deduct contributions from an Individual Retirement Account.

Finally, you need to answer if you are currently enrolled or covered by any employer’s retirement plan. Individuals participating in a 401k or 403b have their eligibility to contribute to Roth and IRAs directly linked to their adjusted gross income.

Some additional information that can help you determine whether or not a Roth or IRA account is right for you includes the following: Married couples who have at least one spouse participating in an employer sponsored plan can still contribute to a retirement account provided that they file married jointly and their total retirement contributions falls under the Roth and IRA contribution caps.

For married couples under 50, there is an $8000 annual maximum total contribution allowed between an ESP with any combination of an IRA or Roth account. After 50, the maximum total contribution for the same circumstances is $10,000 annually. Another consideration in choosing whether an IRA or Roth account is better suited for you is your adjusted gross income. If your income per year exceeds $99,000 single or $156,000 (for at least the 2007 fiscal year, amounts subject to change over time) then you are only eligible for a traditional IRA. However, regardless of income, there are usually some limits on the amount of interest deductibility on a traditional IRA.

Regarding the deductibility of contributions to retirement accounts. Roth contributions are not tax-deductible. Instead they are tax free. IRA contributions however, are generally tax-deductible, but accrue interest as the amount in your fund increases. At withdrawal time, there are no taxes due on a Roth account, but there are on a traditional IRA.

For complete details on the deductibility of a traditional IRA contribution, consult a professional. What if I need the money now? Roth contributions are deductible sans-penalty. The interest accrued on a Roth retirement account however is subject to early withdrawal penalties. IRAs are subject to penalties for early withdrawal. Some circumstances are exempt from retirement fund penalties. They include college tuition and first time home buying.

Using the information you gather from a thorough and more in depth look at Roth versus IRA accounts, you will be able to come to a decision on which type of account is right for you to save towards your golden years. If any doubts persist, do not hesitate to consult with a financial advisor.