Traditional IRAs

Looking for a tax-deferred retirement plan? A Traditional IRA may be for you. With a Traditional IRA, interest earned as income is not taxable until the funds are withdrawn. Usually this occurs after retirement when the taxpayer is in a lower tax bracket. IRA earnings grow tax-deferred.

• Contributions to a Traditional IRA can be tax deductible in the year they are made depending on the IRA holder's income level and participation in Employer Sponsored retirement plans.
• Contributions can be made up until your tax deadline, generally April 15, for a prior year contribution.
• Contributions can be the lesser of the annual contribution limit or 100% of earned income per participant and are allowed until the year in which the participant reaches the age of 70 ½.
  
  

  Year	Annual Contribution Limit
  2007	$4,000
  2008	$5,000
  2009 and after	$5,000 plus cost of living adjustments

• Generally, Traditional IRA account holders are taxed on distributions in the year the distributions are taken.
• The Traditional IRA account holder is required to begin taking distributions in the year in which they reach age 70½. Individuals can begin to withdraw without IRS penalty at age 59½.
• Individuals who reach age 50 or older before the end of the taxable year may be eligible to contribute an additional $1,000 to a Traditional IRA as a "catch-up" contribution.

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