Individual Retirement Accounts

IRAs - Traditional and Roth*

The following information outlines our Traditional and Roth IRA products.
Click here for the Latest Rates on Roth and Traditional IRAs.

IRA Type: Traditional IRA Roth IRA

Who can contribute?

Anyone under age 70½ who has income from earned compensation (or who is filing a joint tax return with a spouse who earns compensation).

A distribution from a qualified retirement plan can be rolled into a Traditional IRA at any age, regardless of whether the IRA owner has compensation for that year.

Anyone who has income from earned compensation and whose MAGI* is less than the defined limits:

-Up to $101,000 (single filers)
-Up to $159,000 (joint filers)

If your MAGI* is too high to contribute the annual contribution limit, you may be able to make a partial contribution:

Phase-Out Range:
$101,000 up to $116,000 (single)
$159,000 up to $169,000 (joint)

How much can I contribute?

Annual Contribution Limits:
$4,000 for 2007
$5,000 for 2008

For owners age 50 and older an additional $1,000 catch-up contribution is allowed:

$5,000 total for 2007
$6,000 total  for 2008

The limit is an aggregate total for all of an owner’s Traditional and Roth IRAs.

Contributions cannot exceed compensation.

Annual Contribution Limits:

$4,000 for 2007
$5,000 for 2008

For owners age 50 and older an additional $1,000 catch-up contribution is allowed:

$5,000 total for 2007
$6,000 total  for 2008

The limit is an aggregate total for all of an owner’s Traditional and Roth IRAs.

Contributions cannot exceed compensation.

Who can make deductible contributions?

Deductible up to annual contribution limit:

-Single individuals not active in employer retirement plans

-Single individuals in active qualified retirement plans with MAGI* below defined limits: ($52,000 for 2007, $53,000 for 2008)

-Married couples with neither spouse active in an employer retirement plan

-Married individuals active in qualified retirement plans filing joint tax returns with MAGI* limits below defined limits: ($83,000 for 2007, $85,000 for 2008)

-Married individuals not active in qualified retirement plans filing joint tax returns with spouses who are, as long as MAGI* is below defined limits: ($156,000 for 2007, $159,000 for 2008)

Individuals with incomes exceeding the above limits may be able to deduct a reduced amount

No one can deduct contributions.

 

 

 

 

 

 

 

 

 

 

 

 

 

What are the tax advantages?

-Earnings grow tax-deferred until withdrawn.
-Contributions may be tax-deductible.

-Earnings are tax-deferred and withdrawals are tax-free if the account is open for 5 years and withdrawals are for a qualified reason (age 59 ½, disability, death, or a first-time home purchase**).

When can I withdraw without restrictions?

Withdraw penalty-free for any of the following reasons:

-Qualified higher-education expenses

-First-time home purchase**

-Age 59½

-Disability

-Qualifying medical expenses exceeding 7.5% of adjusted gross income

-Payment to beneficiaries upon the owner’s death

-Payment of health insurance premiums while unemployed for 12 weeks or longer

-Regular contributions can be withdrawn tax and penalty-free at any time.

After the account has been open five years, earnings can be withdrawn tax-free and penalty-free for any of the following reasons:

-Age 59½

-Disability

-Death

-First time home purchase**

When do I have start taking withdrawals?

Beginning in the year the Traditional IRA owner reaches 70½, he or she is required to begin receiving a required minimum distribution (RMD) from their Traditional IRA.

Not required to start withdrawals at age

70½.

 

*MAGI-Modified Adjusted Gross Income.
**Lifetime limit for exemption on first-time home purchase is $10,000
This information is not intended as tax advice.  Please seek a qualified tax professional regarding your individual circumstances. 

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