IRA information and comparisons
| User Rating: | |
| Plan set by: | Individual |
| Contribution Limits: | $7,000/yr for age 49 or less; $8,000/yr for age 50+; limit is for combined contributions to traditional IRA and Roth IRA. |
| Income Limits: | Deductibility phases out: Single: $77,000-$87,000. Married (joint): $123,000-$143,000. Can contribute regardless of income but may not be deductible |
| Employer contributions: | Rarely |
| Investments in the account: | Stocks, Bonds, Mutual Funds, Real Estate (Only in specific types of IRA's). Capital gains, dividends, and interest within account incur no tax liability. |
| Tax Implications: | Contributions may be tax-deductible subject to income limits. Gains in the account are not taxed. Distributions from the account are considered ordinary income and taxed accordingly. |
| Distributions: | Distributions can begin at age 59½ or owner becomes disabled. |
| Forced Distributions: | Must start withdrawing funds at age 70½ unless employee is still employed. Penalty is 50% of minimum distribution |
| Borrowing against Account: | No |
| Early Withdrawal: | 10% penalty plus taxes for distributions before age 59 1/2 with exceptions. |
| Early Withdrawal for Medical Expenses: | Can withdraw for qualified unreimbursed medical expenses that are more than 7.5% of AGI; medical insurance during period of unemployment; during disability |
| Early Withdrawal for Homebuyers: | Can withdraw (without the 10% tax penalty) up to $10,000 for a first time home purchase down payment with stipulations |
| Early Withdrawal for Educational Expenses: | Can withdraw without the 10% tax penalty for qualified education expenses of owner, children, and grandchildren. |
| Conversions: | Can be converted to a Roth IRA. Taxes need to be paid during the year of the conversion. Other limitations may also apply. |
| Withdrawals: | Taxed as ordinary income (distributions from Roth IRAs are not taxed) |
| Changing Institutions: | Funds can be either transferred to another institution or they can be sent to the owner of the traditional IRA who has 60 days to put the money in another institution in a rollover contribution to another traditional IRA. |
| Posthumous benefits: | There are no posthumous benefits. |