| |
Traditional IRA |
Roth IRA |
Education IRA |
Maximum
Contributions |
$4,000- individuals
$8,000- joint filers
$1000 - catch up contributions, age 50 & older |
$4,000- individuals
$8,000- joint filers
$1000 - catch up contributions, age 50 & older |
$2000 total per year, per child (until age 18) |
| Tax Status of
Earnings and Distribution |
Taxed: Taxes on earnings
deferred until withdrawn
|
Not Taxed:
Earnings
grow tax-free and not taxed if withdrawn after age 59
1/2, death or disability,
first time home purchase (up to $10,000) and the account has been
in existence over 5 years. |
Not Taxed: Earnings
grow tax-free and not taxed if used for higher education of beneficiary |
| Contribution Restrictions |
If you are
covered by a retirement plan at work your deductions for contributions are reduced. If
your MAGI*** is more than $50,000 to $60,000 for singles; and
$75,000 to $85,000 for joint filers.
There are no income
limits for nondeductible IRA contributions.** |
Eligibility to contribute is
phased out for MAGI between $95,000 & $110,000 for singles; and
$150,000 & $160,000 for joint filers. |
Same as Roth IRA
(note: There are no restrictions
except income limits on who may contribute to an education IRA on behalf
of a child.) |
|
Tax
Deductions |
For singles, the max
deductible contribution is the lesser of $4,000 or the individual's compensation. For joint filers, the maximum deductible contribution
is lesser of $8,000 ($4,000 per spouse) or couples combined compensation.
$500 - catch up contributions, age 50 & older |
No
Investment uses after tax dollars,
but earnings are distributed tax-free at retirement |
No
Investment uses after tax dollars,
but earnings are distributed tax-free only if used for higher education
expenses. |
| Penalty Tax |
None if:
* Over age 59 1/2
* First time home purchase (up to $10,000)
* Higher education expenses
* Death, disability, or certain
medical expenses |
None if:
* Over age 59 1/2
* First time home purchase (up to $10,000)
* Death or disability (money
must be in account 5 years minimum in all cases) |
None if:
* Higher education expenses
of beneficiary
* Death or disability of beneficiary
* Made on account of a scholarship,
allowance or similar payment |
Restrictions for
those w/
employer
Retirement
Plans |
Non wage earning spouses can
make contributions, even if their spouse participates in an employer retirement
plan
( subject to income limits). |
None |
Not Applicable |
Distributions &
contributions
after 70 1/2 |
Minimum distributions must
begin at age 70 1/2 |
No required minimum distribution
beginning at age 70 1/2 |
Contributions permitted after
age 70 1/2, but funds must be withdrawn by the time the beneficiary reaches
age 30 unless transferred to another beneficiary. |
| * MAGI
is modified Adjusted gross Income. |
** Non-deductible contributions
may also be made to a Roth IRA
(subject to income limits) |
|
|
