Individual Retirement Account

An Individual Retirement Account (IRA) allows you to contribute up to $5,000 ($6,000 if over 50) or 100% of your income (whichever is less) per year. You may also deduct all, or a portion of your contributions, from your income tax return. Your deduction depends upon your participation in a qualified retirement plan and your income level.

Non-Deductible Contributions can be made by people who are not eligible for full or partial IRA deduction. Earnings on the full contribution are tax deferred. Remember, everyone who is eligible can make an IRA contribution. Only the deduction has been limited for some people.

You may begin withdrawing from your IRA at age 59 1/2 with no penalty. You must begin making withdrawals from your IRA when you reach 70 1/2.

IRA's are federally insured, separate from your savings, up to $250,000.

The individual retirement account (IRA) is titled a Sharebuilder. It has no term and the dividends compound quarterly. It is subject to the laws governing IRA's.