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| Category | Roth IRA | Designated Roth account |
|---|---|---|
| Number of Investment Choices | Many as long as not prohibited | As offered by the plan |
| Participation | Anyone with earned income | Participant in a 401(k), 403(b) or 457 governmental plan that allows designated Roth contributions |
| Contribution limits | $7,000 (for 2024), $6,500 (for 2023) $8,000 (if age 50 or older for 2024) $7,500 (if age 50 or older for 2023). $6,000 (for 2020-2022) $7,000 (if age 50 or older for 2020-2022). Contributions are also limited by tax filing status and adjusted gross income. See Publication 590-A, Contributions to Individual Retirement Accounts (IRAs), for a worksheet to figure your reduced contribution. | $23,000 in 2024*, $22,500 in 2023*, $20,500 in 2022*, $19,500 in 2020 and 2021*; $30,000 in 2023*, $27,000 in 2022*, $26,000 in 2020 and 2021* (if age 50 or older). Limit is not impacted by filing status or adjusted gross income. |
| Recharacterization of rolled-over amounts |
Not allowed for Roth conversions made after 12/31/2017 |
Not allowed |
| Required minimum distributions | Only after the original IRA owner’s death | Yes |
| Tax on nonqualified distributions | Nonqualified distributions are distributed in this order:
|
Nonqualified distributions are pro-rated between Roth contributions (nontaxable) and earnings (taxable) |
| Withdrawals | Anytime. May be subject to tax if not a qualified distribution | Only when allowed by the terms of the plan. Subject to tax if not a qualified distribution |
| Loans | No | Yes, if plan allows |
| 5-year holding period for qualified distributions | Begins January 1 of the year a contribution is made to any Roth IRA | Separate for each Roth account and begins on January 1 of the year contributions made to that account. If one Roth account is rolled into another, the earlier start date applies. |
| Beneficiary | Anyone | Anyone but, if married, spouse must consent to nonspouse beneficiary |
*See Cost-of-Living Adjustments for other years’ limits.