Rates and Terms for IRA investments
are available upon request.
SEP and SIMPLE IRAs are also available; please call for more information.
TRADITIONAL & ROTH IRAs ~ A Side By Side Comparison
Am I Eligible To Contribute?
Traditional IRA: Individuals who are
under 70½ years of age for the entire tax year and who have
earned compensation or have received alimony may contribute to a traditional
IRA.
Roth IRA: Unlike a Traditional IRA,
Roth IRA participants may continue to make contributions after they
have reached age 70½ . Individuals who have earned compensation
or have received alimony may contribute to a Roth IRA provided their
income falls within the following guidelines:
Full Contribution If your AGI is less than: |
Partial Contribution If your AGI is less than: |
|
| Single Filer | Tax Year 2008.....$101,000 |
$101,000 - $116,000 no contribution if over $116,000 |
Tax Year 2009.....$105,000 |
$105,000 - $120,000 no contribution if over $120,000 |
|
| Married Filing Jointly | Tax Year 2008…....$159,000 |
$159,000 - $169,000 no contribution if over $169,000 |
Tax Year 2009…....$166,000 |
$166,000 - $176,000 no contribution if over $176,000 |
How Much Can I Contribute Annually?
Traditional & Roth IRAs: The amount qualified IRA owners are permitted to contribute in tax year 2008 and 2009 is $5,000. Additional catch-up contributions can be made by qualified
individuals over fifty. After 2008, the contribution limit will be
adjusted annually for inflation in $500 increments.
Qualified participants are permitted to annually contribute the following
maximum amounts or 100% of your earned compensation and alimony; whichever
is less:
| Maximum Contribution Limits | ||
|---|---|---|
| Year | Under Age 50 | Over Age 50 |
| 2008 | $5,000 | $6,000 |
| 2009 | $5,000 | $6,000 |
Spousal IRA rules enable married couples filing jointly to contribute
the maximum amount to their separate Traditional or Roth IRA accounts
even if one spouse has little or no earned income. To qualify, their
combined income must be equal to or greater than the total contributed
amount.
Are My Contributions Tax Deductible?
Traditional IRA: Contributions to a Traditional IRA are fully deductible if neither you nor your spouse is an active participant in an employer sponsored retirement plan. If you participate in an employer sponsored retirement plan, your income and filing status will determine the amount of your contribution that is deductible from taxes:
Single Person Filing Individually (Contributor is an active participant in an employer sponsored retirement plan) |
||
Tax Year |
Maximum Level for Full Deduction |
Maximum Level for Partial Deduction |
2008 |
$53,000 |
$63,000 |
2009 |
$55,000 |
$55,000 |
Married Couple Filing Jointly (Contributor is an active participant in an employer sponsored retirement plan) |
||
Tax Year |
Maximum Level for Full Deduction |
Maximum Level for Partial Deduction |
2008 |
$85,000 |
$105,000 |
2009 |
$89,000 |
$109,000 |
If you are not an active participant in an employer sponsored retirement plan, but your spouse is, you may deduct the following:
Married Couple Filing Jointly (Spouse is an active participant in an employer sponsored retirement plan) |
||
Tax Year |
Maximum Level for Full Deduction |
Maximum Level for Partial Deduction |
2008 |
$159,000 |
$169,000 |
2009 |
$166,000 |
$176,000 |
Roth IRA: Contributions to a Roth IRA are not tax deductable
Will I receive Tax Free Distributions?
Traditional IRA: You must pay income
tax on distributed amounts from a Traditional IRA attributable to
deductible contributions and earnings. Individuals over age 70½ are permitted to distribute up to $100,000 to qualified charities without paying taxes on the distributed amount. This rule applies to distributions made from now until December 31, 2009.
Amounts withdrawn prior to age 59½ are also subject to an additional 10% early withdrawal tax unless one of the following exceptions applies to the distribution:
- it is made due to death or disability,
- it is made in the form of certain periodic payments,
- it is used to pay medical expenses in excess of 7.5% of AGI,
- it is used to purchase health insurance for unemployed individuals,
- it is used for qualified education expenses,
- or it is used for first-time home buyer expenses of up to $10,000.
- or it is made to a qualified reservist called to active duty after September 11, 2001.
Roth IRA: You will receive your qualified distributions tax and penalty free provided:
- the distribution is made after the 5-year taxable period beginning with the first taxable year in which a Roth contribution was made.
- and the distribution was made:
- after the recipient has reached age 59½ or,
- due to permanent disability or,
- to a beneficiary in the case of death or,
- for first-time home buyer's expenses, up to $10,000.
Is My IRA Insured?
Traditional & Roth IRAs: IRA investments
are eligible for insurance by an agency of the Federal Government
up to $250,000. All IRA accounts can be fully insured separately from
any other non-retirement accounts you may have with us.
IMPORTANT NOTE – The information contained in this brochure is not intended to provide specific advice or recommendations for any individual. We recommend that you consult your attorney, tax or financial advisor with regard to your personal situation.
