The Traditional IRA – Insured up to $250,000
A Traditional IRA offers three basic benefits: security for your retirement years; tax–deferred interest until you withdraw your funds (as early as 59½); and a possible tax benefit. You can set up and make contributions to a Traditional IRA if you, or if you file a joint return, your spouse, received taxable compensation during the year, and you were not 70½ years old by year end.
You can have a Traditional IRA even if you are covered by another retirement plan. However, you may not be able to deduct all of your contributions if you or your spouse is covered by an employer sponsored retirement plan. You can call us at 310–638–2934, to talk with an IRA Specialist.
The annual contribution limit is $5,000 for 2007, and $5,000 in 2008 and hereafter. After 2008, limits may be adjusted annually for inflation in $500 increments as determined by the IRS. The annual limit applies to any combination of IRA plans other than the ESA.
Contributions are fully deductible if you are not an active participant in an employer retirement plan or your income does not exceed certain limitations. Investments grow on a tax–deferred basis. Distributions must begin at age 70½. Contributions and earnings are taxed only upon withdrawal.
Catch Up Contributions: Individuals who have reached age 50 by the end of the year will be able to make up additional catch–up contributions of $1,000 per year to their traditional IRA.