Traditional
IRA or Roth IRA
Eligibility
Traditional
IRA --Almost anyone under the age of 70 1/2 and with an earned income is
eligible to establish a traditional Individual Retirement Account (IRA). A
Traditional IRA can be established in addition to any type of government
plan, tax-sheltered annuity, simplified employee pension plan, or a
qualified plan provided by an employer. In addition, many employer sponsored
plans offer limited investment options, but a traditional IRA can provide
greater flexibility and hold almost any investment.
Roth IRA-- If you are one of many who expect to be in the same or a
higher tax bracket in retirement, paying taxes now on a Roth IRA may save
you money over the long run. Roth IRA contributions are nondeductible and
taxed in the year they are earned.
Not everyone
is eligible to contribute to a Roth IRA. Income restrictions dictate that
taxpayers with an income exceeding $110,000 (single filers) or $160,000
(married joint filers) cannot contribute to a Roth IRA. Also, combined
annual contributions to Roth and Traditional IRAs are limited to a total of
$4,000 ($5,000 of those aged 50 and over) for individuals taxpayers ($8,000
or $10,000, respectively, for married couples).*
Contribution Limits
|
Tax Year |
Contribution Limit |
Contribution Limit - Age 50 and over |
| 2005 |
$4,000 |
$4,500 |
| 2006 - 2007 |
$4,000 |
$5,000 |
| 2008 |
$5,000 |
$6,000 |
| 2009 and after |
$5,000 & Cost of Living Adjustment |
$6,000 & Cost of Living Adjustment |
Talk with a
Baylake Bank Customer Service Representative
near you for more information about IRA eligibility and contribution
limits.

*Consult your tax
advisor.