IRA OptionsTraditional IRA

The basics remain the same for a Traditional IRA in 2012, but there are also a few changes:

The tax deductibility levels have increased for those taxpayers who are covered by a retirement plan at work: singles with Adjusted Gross Income (AGI) under $58,000 (phase-out to $68,000) and married couples with AGI under $92,000 (phase-out to $112,000) may deduct all or a portion of their contribution. 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.

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.