Traditional IRA

Current IRA Tax Provisions

A Traditional IRA is still the best IRA for long term retirement planning. You don’t pay taxes now on these retirement accounts, when your income is high. At retirement, you are able to take out your funds or roll them over into another option. Taxes paid then are considerably less, since your income will be less.

Here are some facts about traditional IRAs:

• You must be under age 701/2 to be eligible for a traditional Nondeductible IRA.
  
• Non-working spouses can now make fully deductible contributions to an IRA, even if their spouse participates in a retirement program, as long as their joint income does not exceed $150,000.
  
• You may invest up to $2,000 each year for singles and $4,000 for married couples filing jointly.
  
• You may be able to withdraw money before age 591/2 without a penalty to purchase a first home (up to $10,000 maximum) or pay qualified costs of higher education.

For more information about IRAs, speak to your financial advisor. Contact your credit union to open your IRA today and start saving for tomorrow.

2002 Tax Law IRA Provisions
Beginning in 2002, the new tax law will increase the amount you can contribute to an Individual Retirement Account (IRA).

Traditional IRA tax-year contributions will increase from the current $2,000 single taxpayer limit to progressively higher limits according to this Internal Revenue Code 219(b)(5)(A),(C) schedule:

• Eligible married couples filing jointly can also take advantage of the increases.

Age 50+ Catch-Up Provision
Individuals who are age 50 and older before the end of the taxable year, and before application of the Adjusted Gross Income phase-out limits, can increase their IRA contribution by:

• $500 for 2002 through 2005
• $1,000 for 2006 and thereafter.

For more information about IRAs, speak to your financial advisor.

Contact your credit union to open your IRA today and start saving for tomorrow.