Traditional IRA
You can contribute to a traditional IRA if you earn compensation
and you will not reach age 70 1/2 by the end of the year.
Earnings in a traditional IRA are not taxed until they
are withdrawn. The ability to defer taxes on earnings,
and to withdraw in a year when you may be in a lower
tax bracket, can mean more after tax dollars for your
retirement.
With a Traditional IRA:
- Earnings accumulate tax-deferred
- Contributions
are tax-deductible if you qualify
- The amount you can contribute
each year is increasing
Roth IRA
Unlike traditional IRAs, contributions to a Roth IRA are
never tax-deductible. However the money in your Roth
IRA, including earnings, can be withdrawn tax-free. Of
course, you must conform to certain tax requirements
to get this tax-free advantage.
With a Roth IRA:
- Contributions
are allowed at any age
- Qualified distributions are tax-free
- Flexible withdrawal options are available
- The amount you can contribute each
year is increasing
*The annual contribution limit for someone
under age 50 is $4,000 for 2007, and $5,000 for 2008. The
annual contribution limit for someone age 50 or older is
5,000 for 2007, and $6,000 for 2008. Please
contact your tax adviser or financial professional regarding
your individual circumstance.
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