ROTH or TRADITIONAL IRA,USE IT OR LOSE IT

It’s that time of the year again, set up, make or consolidate your IRA today

IRA Contribution Limits
YEAR AGE 49 & BELOW AGE 50 & ABOVE
2002-2004 $3,000 $3,500
2005 $4,000 $4,500
2006-2007 $4,000 $5,000
2008 $5,000 $6,000

After 2008, the contribution limit will raise in increments of $500 depending upon the level of inflation.

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If you are single and your modified adjusted gross income is below $50,000, you can sock away $4,000 in a traditional IRA. If you happen to be 50 or older, you may add $500 under the catch-up provision. In order to receive the full deduction, your modified adjusted gross income must be below $70,000, if you are married and filing jointly. If you earned more than these amounts, you may still be able to contribute and receive a partial deduction, but you should consult with your accountant.

the income limits for ROTH IRA's are much higher, $95,000 or less for single taxpayers and $150,000 or less for married people filing jointly. The great thing about the Roth IRA is that growth is tax free! You must leave the money in past age 59½; however, you do not have to take withdrawals and are not forced to do so at age 70½.