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