INDIVIDUAL RETIREMENT ACCOUNTS
at a Glance 2009
ABOUT THE NEW ROTH IRA:
Features Tr a d i t i o n a l I R A Roth IRA Rollover IRA
Tax • Earnings grow tax-deferred until with- Earnings grow tax-deferred and may Continued
advantages drawn at retirement be withdrawn tax-free at retirement tax-deferred
growth
• Contributions may be tax-deductible
Who can A wage earner and/or his/her A wage earner, and/or his/her non-working Any individual who is
contribute non-working spouse under age spouse, at any age, including beyond receiving a qualified
70½, regardless of income level. 70½ who is a: retirement plan
distribution.
Single filer <$105,000 full contribution
($105,000-$120,000 subject to phase out,
over $120,000 no contribution allowed)
Married filing jointly <$166,000 full
contribution
($166,000-$176,000 subject to phase out,
over $176,000 no contribution allowed)
Maximum annual For year 2009, up to $5,000 per year per For year 2009, up to $5,000 per year per Any eligible amount
contribution person (reduced by contributions to a Roth person (reduced by contributions to a may be rolled over.
IRA) Traditional IRA)
Catch-up For year 2009, anyone age 50 and older For year 2009, anyone age 50 and older N/A
contributions may make an additional “catch-up” may make an additional “catch-up”
contribution in the amount of $1000. contribution in the amount of $1000.
Are contributions If no employer sponsored plan, Contributions are non-deductible N/A
tax-deductible contributions are fully deductible.
If covered by an employer sponsored
plan, deductibility is determined by your
modified adjusted gross income and your
tax filing status.
Can also have a non-deductible IRA
Income taxes YES NO —Tax-free if account is open YES
on withdrawal five years AND
of earnings • Owner is age 59½ or
• First time home purchase
(up to $10,000) or
• Death or disability
Income taxes YES — if contributions were NO — Contributions can be withdrawn at YES —Withdrawal of
on withdrawal tax-deductible anytime and without penalty rollover amounts are
of contributions taxable, to the extent that
they were tax deferred.
Penalty on early YES — 10% if under age 59½, penalty is YES — 10% if under age 59½, penalty is YES, same as
withdrawal waived if withdrawals are for: waived if withdrawals are for: Traditional IRA
Higher education expenses, first time home Higher education expenses, first time home
purchase (up to $10,000), death, disability, purchase (up to $10,000), death, disability,
equal lifetime payments and certain medical equal lifetime payments and certain medical
expenses (other exceptions also apply). expenses (other exceptions also apply).
Required YES — Beginning at age 70½ NO YES —Same as
withdrawals Traditional IRA
Are rollovers and YES — May roll over/transfer to YES — You may roll over/transfer to and YES — For any
transfers permitted and from other Traditional IRAs. from other Roth IRAs. individual with
YES — May also roll over from YES — Beginning in 2008 you may roll an eligible rollover
qualified employer-sponsored plans, over qualified retirement plan dollars to a distribution, regardless
including Profit Sharing, Money Roth IRA, but only if you satisfy the of age.
income and tax filing status below.
Purchase, 401(k), 457, and others.
You may convert a Traditional IRA to a Roth IRA (if
adjusted gross income is less than $100,000 for
single/married/joint filers in year of conversion).
Have Questions? Call the Key Retirement Center at 1-888-KEY-2020 ®