- Important IRA Information
New options for Individual Retirement Accounts (IRAs) are available to you with 1997 Tax Law changes.
The creation of the ROTH IRA allows you to grow your savings and withdraw them at retirement paying 0% capital gains tax!
You have until April 15 of the next year to open or add to your last year’s IRA. In any year, at any time, you may open an IRA and make smaller, incremental deposits all year long.
Every effort is made to insure the accuracy of this information, but space limitations prevent complete explanations of facts. Also, information is subject to change if revised or amended by congressional action. Contact your tax adviser for what best suits your situation.
- Traditional IRA
Traditional IRAs, starting 1998 have expanded eligibility for fully deductible IRAs. Maximum Contribution: $5,000 or 100% total for Trad’l and Roth Contributions may or may not be deductible, your and your financial adviser can determine what applies to your specific situation. Early withdrawal penalties do not apply if: *Over age 59 1/2 ,*First time home purchase, *Higher education expenses, or *Health/disability emergency.
Restrictions for those with employer retirement plans: Spouse may now participate in employer sponsored plan with no impact on the eligibility of the non-working spouse.
Contributions after 70 1/2 are not permitted.
- Roth IRA
Maximum Contribution: $5,000 total for Traditional and Roth combined. Contributions are not tax deductible.Early withdrawal penalties do not apply if: *Over age 59 1/2 ,*First time home purchase, or *Health/disability emergency. Money must be in account five years minimum in all cases.
Contributions are permitted after the age of 70 1/2.
- Educational IRA
An Education IRA permits you to put away up to $2000 per year, per child for higher education, paying 0% capital gains tax upon withdrawal. (It is not necessary to be the parent to open an Education IRA for a minor, so you can set back money for a child you love.)
Maximum contribution of $2000 per year per child till age 18. Contributions are not tax deductible. Early withdrawal penalties do apply.
Contribution after age 70 1/2 are permitted, but funds must be withdrawn or rolled over by the time the beneficiary reaches age 30 or be transferred to another beneficiary.