What’s the difference?
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Tax-deductible contributions; earnings are taxed when withdrawn.
Withdrawals are penalty free beginning at age 59 ½.
Distributions must begin at age 70 ½.
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No tax break for contributions; earnings not taxed when withdrawn.
Contributions can be withdrawn after 5 years with no tax penalty.
No required distributions at any age.
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Benefits
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Interest earned is tax-deferred.
Contributions may qualify for a tax credit.
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Interest earned is tax-deferred.
Contributions may qualify for a tax credit.
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