What Is An IRA?

What is an IRA? A IRA is a special account wherein a person can contribute a certain amount of money towards retirement. In most cases, you will be able to deduct this contribution from your taxes. This would depend on your filing status and income.

There is now more flexibility with people who are in their employer retirement plans, wherein the amount of income earned has been increased in order for contributions to be made to an IRA.

How much money can I contribute into an IRA account if I am under age 50? The maximum amount you can contribute to a traditional and Roth IRA is up to $5,000 for 2010.

Will I be able to contribute more money to my IRA if I am age 50 or over? Yes. The maximum contribution amount can be made to a traditional and Roth IRA up to $6,000 for 2010.

After 2010 the traditional IRA and Roth IRA are projected to increase in increments of approximately $500 depending on the level of inflation.

What is a Roth IRA? A Roth IRA is non tax deductible for individuals who do not qualify for the traditional IRA. The advantage of having a Roth IRA is that earnings inside this account are not taxable, and all qualified distributions are tax free when you or your beneficiary makes a withdrawal of the proceeds.

Eligibility for the Roth IRA would be based on your income and filing status at the time you apply for the plan.

What Is Retirement Planning?

Return To Home Page