IRA Options
Make the most of your opportunities.
An Individual Retirement
Account (IRA) is a basic form of retirement plan designed to provide individuals
with a tax-advantaged means to invest for their future. This section of our
site is designed to help you choose the IRA that is right for you.
See which IRA you qualify for by using our IRA Qualifier.
Overview
| Traditional IRA |
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Roth IRA |
| Designed to provide individuals with a tax-advantaged way
to invest for their future. |
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Contributions are made with after-tax dollars. |
| Income earners and their spouses may each contribute up to $5,000 for
the 2008 tax year. For investors age 50 and over, the contribution limit
is $6,000. Contribution limits will continue to increase with the cost of living adjustments. |
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Income earners and their spouses may each contribute up to $5,000 for
the 2008 tax year, subject to the income limits. For investors age 50
and over, the contribution limit is $6,000. Contribution limits will continue
to increase with the cost of living adjustments. |
| Contributions may be tax deductible for the year they are contributed
(pre-tax dollars). |
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Earnings grow tax free and are withdrawn without any tax consequences
if certain requirements are met. |
| Earnings grow free from taxation until they are withdrawn in retirement
(tax deferred). |
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The Advantages
| Traditional IRA |
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Roth IRA |
| Up-front tax break (contributions can be deductible). |
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Never owe taxes on money redeemed, as long as withdrawal rules are observed. |
| No taxes owed until withdrawals begin, usually in retirement. |
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May be in higher tax bracket in retirement, yet withdrawals are tax
free. |
| May be in lower tax bracket by the time you tap your account. |
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More spendable income in retirement; less taxable income to bump up
your tax bracket. |
| Anyone under age 70½ with earned income can make nondeductible contributions. |
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No minimum distributions required at age 70½. |
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Easier to qualify for than Traditional deductible IRAs – broader
income limits and no active participant rules. |
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Investments can grow in different ways
Everyone has the chance to take advantage of generous tax-favored
ways to make their money work harder than ever.
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