Traditional IRA

Reap Tax Advantages Traditional IRA

• The Traditional IRA may be an excellent tax advantaged vehicle for you to consider as you
  build your retirement savings. You pay no taxes
  on Traditional IRA earnings until distribution.
  This allows you to reap the full advantages of
  compounding. Contributions to Traditional IRAs are tax deductible up to certain income limitations, giving you yet another tax privilege.

Traditional IRA Considerations

• If you have compensation as defined by IRS
  Publication 590, and you are under the age of 70½ for the entire tax year, you can open a Traditional IRA, even if you participate in an employer-sponsored plan. In the case of a married couple filing a joint Federal Income Tax return, a spousal contribution can be made if only one spouse has compensation or elects to be treated as if he or she has no compensation.
• Withdrawals prior to 59 1/2 may be subject to a 10% IRS penalty.

Contribution Limits

Investors under 50 years of age can contribute up to
$4,000 a year in a Traditional IRA and/or Roth IRA
through 2007. For 2008, this amount will increase
to $5,000. After 2008, the contribution limit will
be adjusted for cost-of-living increases in $500
increments through 2010.

If you’re 50 or older, you can benefit from the catchup
contribution, which allows you to invest an extra
$1,000 a year through 2010. Married couples with one spouse not employed may contribute twice the annual contribution limit or 100 percent of the combined income of both parties, whichever is less.