| Who is eligible to contribute? | Anyone under age 70 1/2 who has earned income | Single individuals who earn less than $116,000 and married individuals who earn less than $169,000 combined for 2008 |
| How much can I contribute?1 | 2008 Tax Year: - Maximum Contribution: $5,000 if you are under age 50.
- Maximum Contribution: $6,000 if you are age 50 - 70 1/2.
| - If you are single, you can make the maximum contribution (same as Traditional IRA) if your Adjusted Gross Income (AGI) is $101,000 or less, or a partial contribution if your income is between $101,000 and $116,000.
- If you are married and file a joint income tax return, you can make the maximum contribution (same as Traditional IRA) if your combined income is less than $159,000, or a partial contribution if your income is between $159,000 and $169,000.
- Indexed to inflation for 2009 and limit removal is set to occur in 2010.
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| What is the deadline for my contributions? | 2008 Tax Year:
Wednesday, April 15th, 2009 | Same as Traditional IRA |
| When can I begin withdrawing funds without incurring a penalty? | - Age 59 1/2, but you must start withdrawing by April 1st following the year in which you reach 70 1/2.
- Beneficiaries can withdraw upon the death of the primary owner.
- For first-time home purchases, qualified higher education expenses, or disability. (These distributions are still subject to income tax.)
| - Age 59 1/2, after 5-year holding period has been met, but unlike Traditional IRAs, you do not have to begin distributions at age 70 1/2.
- For first-time home purchases, disability, or qualified higher education expenses if 5-year holding period has been met. (These distributions are not subject to income tax.)
- Contributions (not earnings) to a Roth IRA may be withdrawn at any time without the payment of income tax.
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| What are my tax benefits?1 | - Investment earnings grow tax-free until they are withdrawn.
- Earn interest while gaining tax advantage during peak earning years.
- Pay taxes only on amounts withdrawn and without penalty after age 59 1/2, when you are potentially in a lower tax bracket.
- Save money by lowering your taxable income through tax deductibility of contributions (depends on income, filing status, and participation in an employer plan).
| - If you have met the 5-year holding period, you will not pay taxes on earnings as long as you begin taking withdrawals after age 59 1/2, or for specific purposes such as first-time home purchase, disability, or qualified higher education expenses.
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May adjust annually for inflation, but only in $500 increments.
