Traditional and Roth IRA

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What is an IRA?

Individual Retirement Accounts (IRAs) help people save and invest for their retirement while enjoying certain tax advantages. IRAs can be used by individuals who are self-employed, own a business, or simply want to invest with tax benefits. To encourage people to save long-term, the IRS imposes a penalty to withdrawals before the age of 59 ½.

TRADITIONAL IRA*

Get your tax benefits upfront
Don’t pay income tax on the money you put in
You pay income tax when you withdraw
Best if you already have an emergency fund

ROTH IRA*

Get your tax benefit when at retirement
Pay income tax in the money you put in
No income taxes for withdrawals after age 59½
Can be used in case of an emergency

Start here for any mid- to long-term goal →

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You don't need to be an expert to invest your money successfully. Finhabits does that for you.

Traditional IRA vs Roth IRA

Funded with

Contribution Limits

Withdrawal Age*

Income Limits (2023)**

Roth

IRA

After-tax dollars

$6,500 ($7,500 if age 50 or older)

Age 59½ and over

Modified AGI single $153,000/married $228,000

Traditional

IRA

Pre-tax dollars

$6,500 ($7,500 if age 50 or older)

Age 59½ and over

No income limits to participate

* Roth IRA: Early distributions or withdrawals of contributions and earnings could avoid tax penalties provided it is a qualified exception such as unreimbursed medical expenses, first-time home purchase, qualified educational expenses, death, disability, and health insurance costs, if unemployed. Traditional IRA: There are no income limits for Traditional IRAs, but there are income limits for tax-deductible contributions. Other rules apply to both IRAs. Please consult with a tax expert for more details.

Security is everything

We manage your data with the same care as a bank.

There’s nothing more important to us than keeping your money and personal information safe and sound.

Finhabits is an SEC-registered investment advisor. With Finhabits, you can count on bank-level security that includes a 265-bit SSL-encrypted connection on our site.

And you can rest easy, since your money is held in accounts insured up to $500,000 by SIPC.

How can you start investing?

1 Download the Finhabits app

You can get started in Spanish or English. Our service is 100% bilingual.

2 Register with your SSN or ITIN

Select an investment portfolio: Conservative, Aggressive, or Recommended.

3 Schedule your deposits

Finhabits lets you connect your bank account to your Finhabits account within seconds.

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You don't need to be an expert to invest your money successfully. Finhabits does it for you.

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Our services include:

Automated deposits

Finhabits lets you schedule weekly, biweekly, or monthly deposits. You can start with $10, $100, or $1,000. You decide!

Bilingual mobile app

Use Finhabits to monitor your investment accounts and manage your deposits and withdrawals.

Dividend reinvestment

All the dividends you earn are reinvested to purchase more shares. This helps accelerate the power of long-term compounding in your investments.

Educational videos and podcasts

Learning about money and financial habits can be difficult. That’s why the Finhabits app includes educational videos and podcasts about building good financial habits.