|
A
Traditional IRA is the term for a regular IRA available to
those under age 70 1/2 who have earned income (i.e., job compensation).
Earnings within the traditional IRA grow tax-deferred until
withdrawal. Withdrawals must begin, and will be taxed, when
the owner reaches age 70 1/2. If required distributions are
not taken at that age, a 50% penalty will be assessed on the
amount not taken. When made, contributions may or may not
be tax deductible. Individual filers, covered by a Retirement
Plan at work, may make a fully deductible $3000 contribution
if their Modified AGI is less than $33,000. The deduction
decreases to zero at $43,000. There is no AGI limit for contributions
if an individual is not covered by a retirement plan at work..
|
