Individual Investors - Which Is Right for You?

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Which Is Right for You?

Traditional IRA vs. Roth IRA

Comparison	Traditional IRA	Roth IRA
Eligibility	Anyone under the age of 70 ½ with earned income.	Anyone with earned income (no age restrictions) whose MAGI is not in excess of $169,000 for 2008, $176,000 for 2009 (joint returns) or $116,000 for 2008, $120,000 for 2009 (single returns).
Establishment Deadline	Tax filing due dates, no extensions.	Tax filing due dates, no extensions.
Total Contributions	100% of compensation or $5,000 for 2008 or 2009 (combined limit between Traditional and Roth IRA) per individual, whichever is less.	100% of compensation or $5,000 for 2008 or 2009(combined limit between Traditional and Roth IRA) per individual, whichever is less.
Federal Tax Penalty-Free Distributions	Distributions are allowed after age 59 ½, or due to death, disability, using 72(t) method, certain medical expenses, medical insurance during long-term unemployment, first-time home purchases and higher education expenses.	Distributions of contributions are tax-free and penalty-free at any time. Earnings distributed penalty-free after age 59 ½, or due to death, disability, using 72(t) method, certain medical expenses, medical insurance during long-term unemployment, first-time home purchases and higher education expenses.
Required Minimum Distributions*	Must start by April 1st of the year following the year the individual reaches age 70 ½ or within certain time limits after death. Failure to take out minimums may result in a 50% penalty tax on required amounts not withdrawn.	Mandatory distributions are not required at age 70 ½ but mandatory post-death distribution rules apply.

* For tax year 2009 only, RMDs are suspended.

Morgan Stanley Smith Barney and its Financial Advisors do not offer tax advice. Individuals should consult their personal tax advisor before making any tax-related investment decisions.

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