Customers who want to take advantage of tax-deferred earnings and possible yearly deductions.

Customers who want to take advantage of potential tax-exempt treatment of withdrawals.

If eligible, your contributions may be tax-deductible and you don’t pay taxes on the account’s earnings until you withdraw them. This is an advantage if you expect to be in a lower tax bracket when you retire.

If eligible, your contributions are made in after-tax dollars but earnings on qualified withdrawals are free from federal taxes. This is an advantage if you expect to be in a higher tax bracket at retirement as during working years.

You can contribute up to the year you turn 70 ½ as long as you have earned income.

There are no age limitations. Your Modified Adjusted Gross Income (income before certain deductions) determines your eligibility to contribute to a Roth IRA.

If you’re single and your Modified Adjusted Gross Income (MAGI) is:

• $95,000 or less, you may contribute the maximum annual contribution limit to a Roth IRA
• Between $95,000 and $110,000, you may make a partial contribution to a Roth IRA
• More than $110,000, you may not contribute to a Roth IRA

If you’re married and your joint MAGI is:

• $150,000 or less, you may contribute the maximum annual contribution limit to a Roth IRA
• Between $150,000 and $160,000, you may make a partial contribution to a Roth IRA
• More than $160,000, you may not contribute to a Roth IRA

May be opened for a non-working spouse.

May be opened for a non-working spouse.

2005 tax year: $4000 ($4,500 age 50 and older)

2005 tax year: $4000 ($4,500 age 50 and older)

You may be able to deduct your contributions depending on your income, filing status, whether you are covered by a retirement plan at work, and whether you receive social security benefits.

If you are covered by a retirement plan at work
2005 tax year:

• Fully deductible if MAGI is less than $50,000 (single) or $70,000 (joint)
• Partially deductible if MAGI is between $50,000 and $60,000 (single) or $70,000 and $80,000 (joint)
• No deduction if MAGI is over $60,000 (single) or $80,000 (joint)

If your spouse is covered by a retirement plan at work

• Fully deductible if MAGI is less than $150,000 (joint)
• Partially deductible if MAGI is between $150,000 and $160,000 (joint)
• No deduction if MAGI is over $160,000

If neither spouse is covered by a retirement plan at work, the contributions are fully deductible, regardless of income level.

Contributions are made in after-tax dollars; no deductions are allowed.

Tax-deductible contributions and earnings are taxed as ordinary income when withdrawn.

After-tax contributions are withdrawn tax-free.

Contributions (all are made after tax) and earnings are income tax-free if the account is held for 5 years and earnings are withdrawn due to:

• Attaining age 59 ½
• First time home purchase ($10,000 lifetime limit)
• Disability
• Death

Withdrawal of earnings for non-qualified reasons may be taxed as ordinary income and subject to an early withdrawal penalty.

Yes.

• You may transfer to and from other Traditional IRAs.
• You may rollover from qualified employee-sponsored plans.
• You may convert to a Roth IRA if MAGI is under $100,000.

Yes.

• You may convert from a Traditional IRA if MAGI is under $100,000. (Tax must be paid on deductible contributions and all earnings upon conversion.)
• To transfer from a qualified employer retirement plan to a Roth IRA, you must first rollover fund to Traditional IRA.

Must begin at age 70 ½

Upon death of owner

10% IRS early withdrawal penalty if withdrawn before age 59 ½ unless exception applies.

Exceptions:

• Death
• Disability
• Medical expenses in excess of 7.5% of adjusted gross income
• Health insurance premiums if unemployed for 12 consecutive weeks
• Qualifying higher education expenses
• Qualifying first time home purchase ($10,000 lifetime limit)
• Substantially equal payments made over life expectancy

Withdrawal of earnings may be subject to a 10% IRS early withdrawal penalty if withdrawn before age 59 ½ unless exception applies.

Exceptions:

• Death
• Disability
• Medical expenses in excess of 7.5% of adjusted gross income
• Health insurance premiums if unemployed for 12 consecutive weeks
• Qualifying higher education expenses
• Qualifying first time home purchase ($10,000 lifetime limit)
• Substantially equal payments made over life expectancy