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IRA Simplified

July 2009

  
 

It's not too late to make your 2009 IRA contribution.

If you have not opened an IRA account, we can help!
 
The information below is a guide to general IRA information that can take the confusion out of the IRA process.
 
 

Traditional IRA

Benefits 
Earnings grow tax deferred until withdrawn after age 59 1/2, at which time they are taxed at your current tax rate.
 
Contributions and earnings can be withdrawn penalty-free after age 59 1/2.
 
Contributions may be tax deductible.
Eligibility
Anyone under the age of 70 1/2 who has earned income equal to or greater than their IRA contribution amount.
Withdrawals 
A Required Minimum Distribution (RMD) must begin after age 70 1/2 (Waived for 2009) .
Contribution Limits
In 2009:
If you are under 50 you can contribute $5,000
 
If you are age 50 or older you can make an additional $1,000 "catch-up" contribution each year.

ROTH IRA

Benefits
Earnings are tax-free if withdrawn after age 59 1/2 and the account has been open at least 5 years.
 
Contributions (not earnings) can be withdrawn tax and penalty free at any time.
 
Contributions are not tax deductible.
Eligibility
Any age, as long as your modified Adjusted Gross Income (AGI) does not exceed:
 
Single Tax Filer - $120,000
Joint Tax Filer- $176,000
Withdrawals 
No Required Minimum  Distribution (RMD) ever.
Contribution Limits
In 2009:
If you are under 50 you can contribute $5,000
 
If you are age 50 or older you can make an additional $1,000 "catch-up" contribution each year.
 
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