You must begin taking RMD (Required Minimum Distributions) from your Traditional IRA at age 70 1/2. The minimum distributions each year will be computed using an IRS formula. You can no longer make contributions to a Traditional IRA in the year you will reach the age of 70 1/2.

You're not required to take distributions from a Roth IRA as long as you live. You can allow your money to grow in a Roth IRA free of current taxes for as long as you choose.

All earnings and deductible contributions become subject to tax on withdrawal. The tax rate is based on the individual's ordinary income tax rate at the time of withdrawal. If your tax bracket is lower when you receive a distribution than when your IRA earned income, you benefit from tax savings in addition to tax deferral on the earnings. Taxable distributions taken before you reach age 59½ are subject to a 10% federal penalty tax.

Distributions from a Traditional IRA must begin in the year that an IRA holder turns age 70 ½. These distributions are generally based on your IRA account balance divided by your life expectancy. Since the purpose of an IRA is to provide for retirement, not to be a tax shelter, IRA holders who fail to take their required distributions are subject to IRS penalties.

Regular Contributions can be withdrawn tax-free and without an IRS penalty at any time. There are two requirements to qualify for tax-free withdrawals of income on a Roth: Five-Year Test must be met. (Must be five years after the first year for which Roth Contributions were made).

The Traditional IRA is an Individual Retirement Account that may allow contributions to be made on an income tax-deductible basis. Earnings grow income tax-deferred, while withdrawals of income tax-deductible contributions and earnings are taxed at ordinary income tax rates.

If you have income from wages or self-employment income, you can contribute up to $4,000 in 2005-7, higher in later years. Thus, they are available even to children who meet these conditions.

A Traditional IRA (Individual Retirement Account) is a self-sponsored retirement savings plan. Contributions to an IRA may or may not be tax-deductible depending on your adjusted gross income. Consult your tax advisor to answer questions about your eligibility for tax deductions.

in-service distributions are allowed, so are "hardship" distributions, subject to the same conditions. Both the owner and any employees over age 70 1/2 must take required minimum distributions. Unlike qualified plans (e.g., 401(k), profit-sharing, etc.), there is no exception for non-owners who have not retired.

There are three different tax treatments for distributions of earnings from Roth IRAs. The distribution is either: The income tax applies to all withdrawals of earnings made before the "Five-Year Holding Period" is satisfied even if the Roth IRA owner is over 59 1/2, disabled, dies or uses the distribution for a first home purchase.

Rollover - A distribution from a traditional IRA can be contributed to a Roth IRA within 60 days after distribution. Trustee-to-trustee transfer - The financial institution holding the traditional IRA assets will provide directions on how to transfer those assets to a Roth IRA with another financial institution.

There is no requirement that you start receiving distributions from your Roth IRA at a particular time. Withdrawals from your ROTH IRA will, however, be tax-free only after five (5) years of opening your account and if you are over age 59-1/2. I’ve started taking Required Minimum Distributions (RMD) out of my IRAs. Can I still convert them to a Roth IRA even though I am over 70-1/2. Yes. Age is not a factor. Anyone can convert IRAs to a Roth IRA.

A Roth IRA offers significant advantages over a traditional IRA. Chief among them is that the income earned by your Roth IRA, in most cases, is not taxable when you receive it after your retirement (age 59½). Also, Roth IRAs are generally not subject to the required minimum distribution rules that apply to traditional IRAs for persons age 70½.

Not exactly, though your Rollover IRA will be very similar to your Traditional IRA. The primary differences are the source of the money in the account and your ability to transfer that money into a new employer's retirement plan. While you can almost always* combine your rollover assets with your existing IRA to create a single Traditional IRA account, this may limit your future ability to roll that combined account into a new employer's retirement plan.

No. IRAs may only be transferred to the same type of IRA (i.e. Traditional to Traditional, Roth to Roth, etc.) Also note that IRAs cannot contain any margin loans, short positions, or equity option positions.

You must perform this conversion before you transfer your IRA to IB. Your Modified Adjusted Gross Income can't exceed $100,000 (single or joint filers) in the year of the conversion.

Yes, individuals can contribute to a traditional IRA whether or not they are covered by another retirement plan. However, they may not be able to deduct all of their contributions if they or their spouses are covered by an employer-sponsored retirement plan. [Note that contributions to a Roth IRA are not deductible and income limits apply.] See Publication 590 for further information.

The maximum contribution to a Traditional IRA is $3,000 or 100% of earned income per tax year, whichever is less. You must reduce this contribution by the amount contributed to a Roth IRA in the same year. Yes. IRA holders age 50 and older may contribute an extra $500 to their IRA in addition to their regular contribution.

Yes, you can. But remember that you can only contribute up to $3,000 per year to any combination of Traditional and Roth IRAs that you have. You cannot contribute $3,000 to each.

You can withdraw money from a Traditional IRA at any time. However, you may be subject to ordinary income tax and an IRS imposed penalty tax. See next question for further information. You must begin taking mandatory distributions when you become age 70½.

Yes. The 10% penalty on withdrawal under age 59-1/2 won't apply, but ordinary income tax will apply to at least some of the withdrawal.

Yes, as long as the amount of your contributions does not exceed $4000. For example, if you were eligible to make a $2000 deductible contribution to a Traditional IRA, you can also make a $2000 non-deductible contribution to a Traditional or Roth IRA.

The Roth IRA was first introduced in 1998, quickly gaining popularity as the new retirement planning investment vehicle. The main difference between the Roth IRA and the Traditional IRA is that contributions to a Roth IRA are not tax deductible and therefore come from after-tax income. However, the income generated by the Roth IRA is tax-free upon qualified withdrawal. In other words, traditional IRAs offer tax deferral while Roth IRA earnings are

The contribution limits for both the Traditional and Roth IRA for 2006 and 2007 is $4,000 with a "catch up" contribution of $1,000 for those age 50 and over. There are several factors to determine the deductibility of Traditional IRA contributions and the eligibility of Roth IRA contributions based upon adjusted gross income and participation in other retirement plans.

While the Traditional and Roth IRA have different eligibility requirements, the main difference between the Roth IRA and the Traditional IRA is when taxation occurs. A traditional IRA is considered "Pre" tax thus reducing your taxable income in the year contributed. A Roth IRA is "Post" tax thus not reducing your current year taxable income. When distributions are taken after 59 ½ from a Traditional IRA both the contributions and the earnings will be part of your taxable income.

A Traditional IRA can be opened by anyone with earned income from employment that is under the age of 70 ½. The maximum contribution for 2006-07 is $4,000 ($5000 if 50 yrs or older) or 100% of your earned income, whichever is less.