Traditional IRAs

Popular and beneficial to those hoping to establish a retirement plan for the future, traditional IRAs have attractive advantages that deserve consideration.

Annually, you are permitted to contribute $4,000 to your individual IRA and $8,000 if you have opened a combined IRA with your spouse. The individual and combined amounts will increase in 2008 by $1,000 and $2,000, respectively. Furthermore, the amounts are tax deductible and can increase tax deferred.

Incoming monies of the account are taxed as ordinary income, and early withdrawals (under 59 1/2 years of age at the time of withdraw) are subject to a 10% federal tax.

Federal mandates have imposed stricter guidelines on the qualifications for a full deduction, limiting the number of people who can receive this benefit in its entirety.

Contributions that Are Deductible
Enrollment in another qualified retirement may reduce the amount of IRA contributions that you are allowed to deduct.

Consult a Professional
In cases where you are attempting to determine if an IRA is right for your planning needs, it may be best to consult a professional in the financial field who can guide you in the correct direction.

This information is presented to educate the reader and does not constitute professional tax and legal advice.
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