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Year-end Distributions

Estimated year-end income and capital gains distributions as of October 31st are now available(opens in a new tab)

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Traditional vs. Roth IRAs


Which is best for your long-term goals? Compare now.

Both types of Individual Retirement Accounts (IRAs) offer tax-advantaged ways to save for retirement. The difference is mostly how and when your money is taxed. Both IRA options can be funded by contributions or by rolling over your retirement assets from a 401(k) with another financial institution into your new Dodge & Cox Funds IRA.

 

Traditional IRA

Roth IRA

Overview

Traditional IRA

Your contributions may be tax deductible. Potential earnings grow tax-deferred until you withdraw them in retirement, while your contributions may be tax deductible depending on your income. 

Roth IRA

Contribute to your retirement savings on an after-tax basis. Any potential earnings grow tax-free (if taken as part of a qualified distribution) and can be withdrawn without taxes or penalties as long as they’re eligible. 

Tax benefits

Traditional IRA

Contributions are generally made with after-tax money but may be tax-deductible if you meet income eligibility. Any potential earnings grow tax-deferred and aren’t taxed until you withdraw them.

Roth IRA

Contributions are made with after-tax money and any potential earnings grow tax-free (if taken as part of a qualified distribution). Additionally, you're able to withdraw your contributions tax-free and penalty-free at any time, for any reason. Earnings can be withdrawn without taxes or penalties as long as they’re eligible. 

Contribution limits

Traditional IRA

For 2024 tax year:

  • If you’re under age 50: you can contribute up to $7,000.
  • If you’re age 50 or older, you can contribute up to $8.000.

The figures above are the amounts you can contribute in a given year, in total, across all your traditional and Roth IRAs, including those you hold with other financial institutions. 

Roth IRA

For 2024 tax year:
 

  • If you’re under age 50: you can contribute up to $7,000.
  • If you’re age 50 or older, you can contribute up to $8,000.

Your ability to contribute to a Roth IRA phases out at certain income levels ($146,000 to $161,000 for 2024 for single taxpayers; $230,000 to $240,000 for 2024 for married taxpayers filing joint returns; $0 to $10,000 for 2023 for married taxpayers filing separate returns).

The figures above are the amounts you can contribute in a given year, in total, across all your traditional and Roth IRAs, including those you hold with other financial institutions.

Withdrawals

Traditional IRA

You’ll pay taxes on your earnings and deductible (pre-tax) contributions when you make withdrawals.

 

If you make withdrawals before you are 59½, you might have to pay an additional 10% tax.

Roth IRA

You can withdraw earnings from a Roth IRA without paying federal income taxes or penalties if five years have passed since the first day of the year of your first contribution and if you're making the distribution to pay for first-time home purchase expenses (up to a $10,000 lifetime limit).

 

If your withdrawal isn’t a qualified distribution, you’ll have to pay taxes on your earnings and, if you’re not 59½, you may have to pay an additional 10% tax.

Required Minimum Distributions

Traditional IRA

Traditional IRAs generally require you to withdraw a minimum amount of money by April 1 of the year following the year you turn 73.

 

Your beneficiaries must withdraw minimum amounts following your death.

Roth IRA

Roth IRAs don’t require you to withdraw a minimum amount of money at a certain age.

 

Your beneficiaries must withdraw minimum amounts following your death.

Dodge & Cox Funds account fees

Traditional IRA

The typical expenses and fees reflected in each Fund’s expense ratio will apply. There are no additional account maintenance or transaction fees when you invest directly with Dodge & Cox.

Roth IRA

The typical expenses and fees reflected in each Fund’s expense ratio will apply. There are no additional account maintenance or transaction fees when you invest directly with Dodge & Cox.

Minimum initial investment

Traditional IRA

$1,000 per fund per account

Roth IRA

$1,000 per fund per account

Take the next step

Open a Dodge & Cox Funds IRA today. It’s quick and easy to open your account online. 

FAQs about IRAs

You received compensation (or earned income if you’re self-employed) during the year for personal services you rendered. If you received taxable alimony, this is treated like compensation for IRA purposes if the payments are received under a divorce or separation instrument executed on or before December 31, 2018. Compensation also includes any differential wage payments paid with respect to service in the uniformed services and any taxable amounts paid to you in the pursuit of graduate or postdoctoral study. Compensation also includes certain amounts paid as scholarships and fellowships. Compensation doesn’t include amounts received as a pension or annuity, amounts received as deferred compensation, amounts derived from or received as earnings or profits from property, such as interest, dividends and rent, or any amount not includable in gross income. In addition, even if you do not have compensation for a year, you may be able to make nondeductible contributions to a traditional IRA if you receive qualified foster care payments that are difficulty of care payments.

Disclosures

Tax laws and regulations are complex, and subject to change, which can materially impact investment results. Dodge & Cox cannot guarantee that the information herein is accurate, complete, or timely and makes no warranties with respect to such information, including your use of, or any tax position taken in reliance on, such information. Only Dodge & Cox Funds are available for purchase in a Dodge & Cox Fund IRA Account. Investment options available through an employer's retirement plan or other IRA providers and any associated fees and expenses will differ. Consult with a tax or legal advisor before making any investment decision.