About Roth IRAs
The Roth IRA from may offer greater
tax savings and withdrawal flexibility than
a traditional
IRA. Roth IRA accounts have no mandatory annual
distribution
requirements, and you can contribute beyond
age 70-½. Eligibility depends on income.
Apply
Application
Minimum to Open
$1,000
Contribution Deadline
April 15, 2010 for 2009 tax year
Tax
advantages
Contribution
Not tax-deductible
Earnings
Tax free (earnings grow
free of federal income tax)
Withdrawals
Tax free (withdrawal of
original contribution)
Potentially tax-free (withdrawal of earnings if part
of a qualified withdrawal)
Contributions
Eligibility
For
single filers - up to $101,000
for 2008 ($101,000-$114,500
in 2008 for a partial contribution).
For
joint filers - up to $159,000
for 2008 ($159,000-$168,000
in 2008 for a partial contribution).
See chart below.
Annual
To determine your allowable
contribution amount, please see chart below.
You may contribute simultaneously to a traditional
IRA and a Roth IRA (subject to eligibility) as long
as the total contributed to all
IRAs (traditional or Roth) total no more than $5,000 for the tax year
2008 ($6,000 age 50 and older).
Withdrawals
Penalty Free
Withdrawal
of contributions at any age, or earnings after age
59-½ and after
account has been open for five years.
Penalty
Withdrawal of earnings
before age 59-½ or before your account has
been open for at least five years.
Exceptions to penalty
Before
five year holding period ends, subject
to tax, or after five year holding period ends,
not subject to tax, penalties are waived if you are
over 59-½ or funds are withdrawn for:
- Higher education expenses
for you or family members. Expenses include
tuition, fees, books, supplies and room and
board (must be enrolled at least part time).
- First-time home purchase expenses ($10,000
lifetime limit) to buy, build, or rebuild a first
home for you, your parents, children, or grandchildren.
You must not have owned a home within the past
two years.
- Death or disability.
- Certain medical expenses including qualifying
health insurance costs for certain unemployed
individuals and unreimbursed expenses exceeding
7.5% of AGI.
- Withdrawals made in equal installments over
the account holder's life expectancy.
*
Five-year holding periods: There is a single five-year
holding period when determining whether earnings
can be withdrawn tax-free as part of a qualified
distribution from a Roth contributory account. This
period begins January 1 of the year of the first
contribution to any Roth contributory account.
Maximum Allowable Contribution Amounts
The chart below briefly describes the maximum allowable contribution
amount to a Roth IRA for the category that applies to your
household. Your eligibility to contribute to a Roth IRA is
also subject to income limits.
| Individuals under age 50 |
$5,000 |
| Individuals age 50 and older |
$6,000 |
| Married under age 50 (both) |
$10,000 |
| Married age 50 and older (both) |
$12,000 |
-OR- 100% of earned
income, whichever is less.
Eligibility Based on Annual Modified Adjusted Gross
Income
Contributions are made on an after-tax basis, and
can be made even if you contribute to a traditional IRA,
including a Rollover IRA or SEP-IRA, or other employer-sponsored
retirement plan.1
You may use the chart below to figure how much
you may contribute to a Roth IRA based on your modified
Adjusted Gross Income (AGI).
|
Roth IRA
Contributions (Tax Year 2008)
|
|
|
Adjusted
Gross Income |
Maximum
Contributions for Individuals Under Age 50 |
Maximum
Contributions for Individuals Age 50 and Older |
|
|
| Single
Filers |
Married
Filing Jointly |
Married
Filing Separately |
|
|
$101,000
& under |
$159,000
& under |
$0 |
$4,000 |
$6,000 |
|
|
| $102,500 |
$160,000 |
$1,000 |
$4,500 |
$5,400 |
|
|
| $104,000 |
$161,000 |
$2,000 |
$4,000 |
$4,800 |
|
|
| $105,500 |
$162,000 |
$3,000 |
$3,500 |
$4,200 |
|
|
| $107,000 |
$163,000 |
$4,000 |
$3,000 |
$3,600 |
|
|
| $108,500 |
$164,000 |
$5,000 |
$2,500 |
$3,000 |
|
|
| $110,000 |
$165,000 |
$6,000 |
$2,000 |
$2,400 |
|
|
| $111,500 |
$166,000 |
$7,000 |
$1,500 |
$1,800 |
|
|
| $113,000 |
$167,000 |
$8,000 |
$1,000 |
$1,200 |
|
|
| $114,500 |
$168,000 |
$9,000 |
$500 |
$600 |
|
|
$116,000
& over |
$169,000
& over |
$10,000
& over |
$0 |
$0 |
|
|
1. You may contribute simultaneously
to a traditional IRA and a Roth IRA (subject to eligibility)
as long as the total contributed to all
IRAs (traditional or Roth) totals no more than $5,000 for tax year
2008 ($6,000 age 50 and older).
|
Prospectus
