What are the differences between a Roth IRA and a Traditional IRA?
• ROTH IRA – Roth individual retirement accounts were established as part of the Taxpayer Relief Act of 1997. There are several major differences between a ROTH IRA and a Traditional IRA. For single filers – the income limits for making a contribution include up to $95,000 for 2006 and $99,000 for 2007 ($95,000 – $110,000 in 2006 and $99,000 – $114,000 in 2007 for a partial contribution) For joint filers – up to $150,000 for 2006 and $156,000 for 2007 ($150,000 – $160,000 in 2006 and $156,000 – $166,000 in 2007 for a partial contribution). For 2006 and 2007 the maximum annual contribution is $4,000.00. In 2008 the maximum will rise to $5,000. Catch – up contributions can be made by individuals age 50 and older ( in the calendar year of their contribution ) can contribute an additional $1,000 for 2006 and 2007 for a total of $5,000. • Traditional IRA Has no income limits For 2006 and 2007 the maximum annual contribution is $4,000.00. In 2008 the maximum will rise to $5,000. Catch – up c
