TRADITIONAL IRA

What Is a Traditional IRA?

An Individual Retirement Account (IRA) is a personal tax-deferred savings plan for individuals saving money for retirement. A traditional IRA can provide many advantages, including the tax-deferred compounding of investment earnings on your contributions.

Who Can Set Up a Traditional IRA?

You can set up and make contributions to a traditional IRA if:

1. you (or, if you file a joint return, your spouse) received taxable       compensation during the year, and
2. You were not age 70 1/2 by the end of the year.

You can set up a traditional IRA whether or not you are covered by any other retirement plan. However, you may not be able to deduct all of your contributions if you or your spouse are covered by an employer retirement plan. If both you and your spouse have compensation and are under age 701/2, each of you can set up an IRA. You cannot both participate in the same IRA.

Contact us for more information on setting up an IRA.

ROTH IRA

What is a Roth IRA?

A Roth IRA is similar to a traditional IRA, but contributions are not deductible. Your earnings grow tax-free and remain tax-free upon distribution provided that you've held the account for 5 years and are at least age 59 1/2 upon withdrawal. Withdrawals prior to age 59 1/2 will be subject to 10% IRS penalty.

If you satisfy the requirements, qualified Roth IRA distributions are tax free. Contributions can be made to your Roth IRA after you reach age 701/2, and you can leave amounts in your Roth IRA for as long as you live. A Roth IRA must be designated as such when it is set up. Neither a SEP-IRA nor a Simple IRA can be designated as a Roth IRA.

Can I Contribute to a Roth IRA?

Generally, you can contribute to a Roth IRA if you have taxable compensation, and you meet the modified adjusted gross income guidelines. In 2010, anyone can contribute to a Roth IRA regardless of income.

Contact us today to learn more about a Roth IRA.