| |
Traditional IRA |
Roth IRA |
Coverdell ESA (formerly Education
IRA) |
| Qualifications |
Must have earned income and not have reached
age 70½ by the end of the year. |
Must have earned income. There are no
age restrictions. |
The designated beneficiary
must be an individual under the age of 18. The age 18 limitation does not apply to any
designated beneficiary with special needs. |
| What is the maximum contribution? |
In 2007: $4,000
In 2008 and after: $5,000 |
In 2007: $4,000
In 2008 and after: $5,000 |
$2,000 per beneficiary
Contributions do not count against the limits for IRA's |
| Are contributions tax deductible? |
Yes. Contributions up to the limit are
fully tax deductible if you are not an active participant
in a retirement plan. Otherwise, phaseout rules apply.
** |
No |
No |
| Tax Status of Earnings |
Tax-deferred until withdrawal. |
Not taxed. Earnings grow tax-free. |
Not taxed. Earnings grow tax-free. |
| Contribution restrictions |
None |
Yes, contributions phase out between $99,000-$114,000
for singles and $156,000-$166,000 for married couples. |
Yes, contributions phase out between $95,000-$110,000
for singles and $190,000-$220,000 for married couples. |
| Penalties for early withdrawal? |
None if:
-Over age 59½
-Death or disability
-Qualified medical expenses
-Certain health insurance
-1st time home purchase (up to $10,000)
-Qualified college expenses
-Due to IRS levy
|
None if 5 year aging requirement
is met AND one (1) of the following conditions are met:
-Over age 59½
-Death or disability
-Qualified medical expenses
-Certain health insurance
-1st time home purchase (up to $10,000)
-Qualified college expenses
-Due to IRS levy |
None if:
-For payment of qualified education expenses |
| Required Distributions |
Must begin by April following year participant
turns 70½. |
Only after death of the participant. |
Must be complete 30 days after beneficiary
reaches age 30 or dies. |
| Contributions permitted after age 70½ |
Not allowed |
Allowed |
Allowed |
IRAs are insured separately
up to $250,000 by NCUA, an agency of the U.S.
Government.
*If you are age 50 or older, you may make an additional
$500 catch-up contribution.
** Consult your tax advisor |
