IRA OptionsTraditional IRA

The basics remain the same for a Traditional IRA in 2009, but there are also a few changes:

The tax deductibility levels have increased: singles qualify with Adjusted Gross Income (AGI) under $55,000 (phase-out to $65,000) and married couples with AGI under $89,000 (phase-out to $109,000). There is no phase-out deductibility level for people who do not qualify for an employer's retirement plan. Call us for further information.
Penalty-free (but, generally, NOT tax-free) withdrawals are available up to $10,000 for first-time home purchases.
Penalty-free (but, generally NOT tax-free) withdrawals are allowed for qualified higher education costs for yourself, your spouse, children or grandchildren.
You can contribute up to $5,000 per person, or $6,000 if you are over 50 years of age.
For the year 2009, Required Minimum Distributions have been waived by the Federal Government. You may still take any amount you desire from your IRA, but you will not be required to take a distribution.

Except for 2009, Traditional IRAs require distributions beginning at 70 1/2 years of age; Roth IRAs never require distribution.
Traditional IRAs are tax deferred; Roth IRAs are tax-free.
Traditional IRAs are potentially tax-deductible; Roth IRAs are not tax deductible, but grow tax-free.
Traditional IRAs can be opened by anyone under the age of 70 who has earned income; Roth IRAs have income ceilings above which a person cannot contribute.