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People 50-years and older are allowed to make catch-up contributions, that is, additional deposits over and above the annual maximum con- tribution. Withdrawals must begin by the time you turn 70-years old.
*You must be projected to reach age 50 or older by 12/31 of the tax year to which the contribution relates.
**Annual contribution will be indexed for inflation in $500 increments thereafter.
Keep in mind that the tax rules change all the time so have your finan- cial advisor help you stay current on IRA standards. Visit your local credit union or bank for information on the amount of contribution you are eligible to make.
Roth IRA: Established in 1997, this plan can be started anytime during any year you earn taxable income. Money can be deposited up to certain annual limits and is not tax deferrable. The earnings, however, are tax free and you pay no taxes on withdrawals provided the withdrawals take place five years or more after the Roth IRA is established and after you turn 59.
The Roth IRA also differs from a Traditional IRA in that you are allowed to continue contributing after age 70 and there are no
Retirement: Are You an Ant or a Grasshopper? 37