| ''''' |
Traditional IRA |
Roth IRA |
Coverdell ESA |
| Qualifications |
Must have earned income and not have reached 70 1/2 by the end of the year. |
Must have earned income. There are no age restrictions. |
The designated beneficiary must be an individual under the age of 18. The age 18 limitation does not apply to any designated beneficiary with special needs. |
| Maximum Annual Contributions |
Taxable years beginning-- - In 2002-2004.... $3000---- - -- --In 2005-2007.... $4000--- --- --In 2008 and after.... $5000
|
Taxable years beginning - --In 2002-2004.... $3000---- - -- --In 2005-2007.... $4000--- --- --In 2008 and after.... $5000 |
Taxable years beginning In 2002 and after... $2000 -------------per beneficiary -Contributions do not count against the limits for IRA's
|
| Tax Status of Earnings |
Tax-deferred until withdrawal |
Not taxed. Earnings grow tax-free. |
Not taxed. Earnings grow tax-free. |
| Contribution Restrictions |
Yes, if active participant in employer retirement plan. |
Yes, contributions phaseout between $95,000-$110,000 for singles and $150,000-$160,000 for married couples. |
Yes, if your Modified Adjusted Gross Income is between $95,000-$110,000 for singles and $190,000-$220,000 for married couples, then contribution phaseout applies. |
| Tax Deductions |
Yes.------------------ Contributions up to the limit are fully tax deductible if you are not an acitve participant in a retirement plan. Otherwise phaseout rules apply.
|
No. |
No. |
| Penalties for Early Withdrawal |
None if:-------------------------- Over 59 1/2---------- ---------- Death or disability----------- Qualified medical expenses Certain health insurance Qualified college expenses 1st time home purchase (up to $10,000)---------------------- Due to IRS levy |
None if:------------------------- Over 59 1/2----------- --------- Death or disability------------ Qualified medical expenses Certain health insurance---- Qualified college expenses 1st time home purchase (up to $10,000)---------------------- Due to IRS levy |
None If: --------------------- For payment of qualified education expenses |
| Required Distributions |
Must begin by April following year participant turns 70 1/2. |
Only after death of the participant. |
Must be complete 30 days after beneficiary reaches age 30 or dies. Beginning in 2002, the age 30 limit will not appply to any beneficiary with special needs. |
| Contributions After Age 70 1/2 |
Not allowed. |
Allowed. |
Allowed. |
