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.

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.

A Traditional IRA is money that goes into a registration of an IRA as pre-tax dollars. These dollars grow tax-deferred and eventually will come out as a taxable withdrawal.

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 70?.

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 59? are subject to a 10% federal penalty tax.

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.

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

Yes, you can contribute to a traditional IRA whether or not you are covered by another retirement plan. However, you may not be able to deduct all of your contributions if you or your spouse is covered by an employer-sponsored retirement plan.

The main benefit is that all contributions are made with "pre-tax" dollars, meaning you deduct your contribution from current income, allowing you to save on taxes.

Yes. Tax law provisions allow you to convert (roll over) your Traditional IRA to a Roth IRA. Certain eligibility requirements (income and tax filing status) apply, such as: your AGI cannot exceed $100,000, and married individuals filing separately may not convert Traditional IRAs to Roth IRAs. Conversion is considered a taxable distribution from your current Traditional IRA for prior earnings and deductible contributions, but not subject to the 10% penalty tax.

Maybe. If your modified adjusted gross income is $100,000 or less (in the year you switch) you qualify to transfer an existing (Traditional) IRA into a Roth IRA. However, married taxpayers filing separately cannot make such a transfer. Keep in mind taxes will have to be paid on the amount transferred from an existing (Traditional) IRA at the time the switch is made. Therefore, if you should transfer or not depends on your specific situation.

You must complete the conversion within 60 days. Because Tax penalties can be assessed if not handled properly, we recommend that you check with a North Shore Bank Investment Advisor or your tax advisor before initiating this type of transaction. No. Unlike with traditional IRAs, which require distributions to begin at age 70, your earnings can continue to grow in a Roth IRA until you need them.