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Traditional IRA (Individual Retirement Accounts) |
A traditional IRA is a tax-deferred account designed specifically for retirement savings. Anyone under the age of 70 1/2 who has earned income may establish and contribute up to $4,000 (2007), ($5,000 if age 50 or older) annually to an IRA.
Plan features:
- Contributions may or may not be income tax deductible
- All earnings are tax deferred until withdrawn
- IRAs decrease reliance on Social Security and pension programs as retirement income sources
- There are expectations to enhance and strengthen IRA opportunities in future years
Eligibility:
- Must be less than 70 1/2 on the last day of the year in which the contribution is taken
- Must earn income for services rendered as an employee or as self-employed
Contribution limits:
- The lesser of 100% of income or $4,000
- If age 50 or older, individuals may contribute an additional $1,000 as a catch-up provision
Deadlines:
- Individuals may contribute to an IRA up until April 15
- Distributions must start by April 1 the year after the individual reaches 70 1/2
Federal taxation of distributions
- made after 59 1/2
- made after the owners death
- due to complete and permanent disability
- part of a series of similar equal payments in a manner approved by the IRS
- for particular medical expenses
- for particular health insurance premiums
- for payment of higher education expenses
- for purchase of first-time home buyer expenses approved by IRS.
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Neither Woodbury Financial Services, Inc., nor its registered representatives or employees, provide tax or legal advice. As with all matters of a tax or legal nature, you should consult with your tax or legal counsel for advice. |
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Securities and Investment Advisory Services offered through Woodbury Financial Services, Inc.,
Member FINRA, SIPC, and Registered Investment Advisor - Licensed in MO, IL, CA, NY
*** 111 West Port Plaza Drive Suite 300 Saint Louis, MO. 63146 ***
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