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CONTRIBUTION AMOUNT REQUIREMENTS |
CONTRIBUTION AGE REQUIREMENTS |
DISTRIBUTION (WITHDRAWAL) REQUIREMENTS |
TAX ADVANTAGES |
| TRADITIONAL IRA |
- The lesser of 100% of earned income or $5,000- (under age 50) $6,000- (age 50 or over) for tax year 2010
- If you are married, filing a joint tax return, you can contribute the lesser of 100% of earnings OR:
- Under Age 50: $10,000 per couple; $5,000 per individual
- Age 50 or over: $12,000 per couple; $6,000 per individual
As long as one or both of the Joint filers have earned income to cover the contribution |
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- Must begin withdrawing from IRA by April 1st of the year following attainment of age 70 1/2
- 10% early withdrawal penalty assessed by IRS for withdrawals made prior to attaining age 59 1/2 (some exceptions apply, consult tax advisor)
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- Contributions may be tax deductible subject to plan participation and AGI limits (consult your tax advisor)
- Earnings are tax deferred until withdrawn
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| ROTH IRA |
- The lesser of 100% of earned income or $5,000- (under age 50) $6,000- (age 50 or over) for tax year 2010
- If you are married, filing a joint tax return, you can contribute the lesser of 100% of earnings OR:
- Under Age 50: $10,000 per couple; $5,000 per individual
- Age 50 or over: $12,000 per couple; $6,000 per individual.
As long as one or both of the Joint filers have earned income to cover the contribution |
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- No required distributions
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- Contributions are made with after-tax money.
- You may make tax-free distributions for a qualified purpose after your IRA has been open for five years and you are age 59 1/2 or older
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| COVERDELL EDUCATION SAVINGS ACCOUNT (CESA) - FORMERLY EDUCATION IRA |
- $2,000 per child per tax year
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- Until the beneficiary reaches age 18 (waived for children with special needs)
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- Balance must be distributed before the beneficiary reaches age 30 or may be rolled over into another family member's CESA
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- Distributions are tax-free if used for elementary, secondary & post-secondary qualified expenses
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| SIMPLIFIED EMPLOYEE PENSION (SEP)/IRA |
- Employer Plan for one or more employees
- $49,000-max contribution for 2010 based on max income of $245,000 for 2010
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- Employee age 21 years (or younger per discretion of employer) to max age of 70 1/2 or older
- Contribution percentage same for employer and employee at discretion of employer
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- Withdrawals follow same eligibility requirements as IRA; prior to age 59 1/2, 10% Early Withdrawal penalty assessed by IRS (some exceptions apply, consult tax advisor)
- Mandatory withdrawals at age 70 1/2
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- Contributions deductible only for Employer
- Earnings tax-deferred until withdrawn
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