Happy senior couple © Robert Kneschke/Shutterstock.com

© Robert Kneschke/Shutterstock.com

Workplace-sponsored retirement accounts aren’t the only way to save. You can also stash money in individual retirement accounts, or IRAs.

IRAs boast rich tax benefits that give savings an extra edge to compound. The tax benefits depend on the IRA you select: a traditional IRA or Roth IRA.

Annual contributions to both accounts are the same in 2016 as in 2015 — up to $5,500 per person, or $6,500 for individuals who are 50 or older.

That said, some experts say the Roth IRA may be the better choice for most individuals because it offers potentially greater tax breaks and more flexibility as far as funding and withdrawing funds.

“I do like the Roth over the traditional IRA for a number of reasons,” says Rick Meigs, president of 401kHelpCenter.com. “I like the concept of having your money tax-free forever. In a Roth IRA, you don’t have to take mandatory withdrawals at 70 1/2 and you can keep contributing to it.”

Roth IRA contributions are funded with after-tax earnings. However, earnings grow tax-free and can be withdrawn tax-free, too, as long as the account is open for 5 years and you’re age 59 1/2 or older at the time of distribution.

Meigs notes that Roth earnings never have to be withdrawn, and you can contribute to a Roth as long as you earn money. That’s a great help for those who plan to work well past traditional retirement years. On the other hand, withdraw earnings before 59 1/2 and you’ll generally pay a 10% penalty on any earnings. You can withdraw your contributions at any time.

However, you may earn too much to fund a Roth, because they’re available only to individuals whose modified adjusted gross income doesn’t exceed a maximum of $132,000 in 2016. For married couples filing a joint tax return, eligibility requirements top out at $194,000.

If your income disqualifies you from funding a Roth, consider the traditional IRA, which offers its own set of perks.

With a traditional IRA, you may be able to claim a full income-tax deduction for your contributions, as long as you don’t have access to a retirement plan at work, such as a 401(k). Single filers who do have access to such a plan can take a full deduction if they earn $61,000 or less, or a partial deduction up to $71,000 in 2016. The income limits are trickier for married couples filing jointly. If you have access to a plan, the limits are $98,000 to $118,000; if your spouse has access to a plan but you do not, the limits are $184,000 to $194,000 for joint filers. Remember: If your employer does not offer a retirement plan, you can get the full tax deduction for traditional IRA contributions regardless of your income.

Even if you can’t claim any tax breaks from your traditional IRA, you can make nondeductible contributions to a traditional IRA. And, since 2010, you have the option to convert a traditional IRA to a Roth IRA, regardless of how much you earn.

At a glance: Traditional IRA vs. Roth IRA

Traditional IRA Roth IRA
Tax deduction for funding the account? Yes, though income limits apply if you have access to a workplace plan. No.
Required minimum distributions? Yes, by age 70 1/2. No.
Earnings Taxed at withdrawal. Never taxed unless withdrawn early.

Either way, the traditional IRA lets earnings grow tax-deferred, so you postpone paying income taxes until assets are taken out of the account. That has to begin by the time you’re 70 1/2 or you’ll face penalties for not taking so-called required minimum distributions. That’s also the age when you’re prohibited from making additional contributions to the traditional IRA.