|
Traditional IRAs |
|
| Tax Benefits | Tax-deferred earnings. |
| Eligibility | Individual with earned income (& non-working spouse) under age 70 1/2 regardless of plan participation status or income. |
| Deductibility of Contributions 2010 limits | Contributions are
deductible if individual spouse is not covered by plan at work.
Individual with plan 2009 deduction limits are phased out for
modified adjusted gross income of more than
Single:$53,000-$63,000 |
| Annual (2010 limits) |
100% of earned income or $5,000 (for each spouse) Catch-up Contributions: IRA holders age 50 & older may contribute $1,000 over the basic annual contributions. |
| Rollover Contributions | Eligible distributions from another Traditional IRA, SEP IRA, qualified plan (401(k), 403(b), 457 plan) or SIMPLE IRA (after 2 years). No taxes due until earnings withdrawn from IRA |
| Mandatory Distribution | Age 70 1/2 (not for 2009) |
| Taxes on Distributions | Ordinary income. 10% penalty before 59 ˝, unless due to death, disability, eligible life-expectancy payment, certain unemployed individuals’ health insurance premiums, limited “first time” home purchases, qualified higher education expenses or IRS levy. |