Benefits

Save for your retirement with tax-deferred earnings. Your contributions may also be tax deductible (with certain limitations).

Save for your retirement with earnings that are tax-deferred and withdrawals that may be tax-free (see below).

Eligibility

You must be younger than age 70 ½ for the years in which you contribute.

Allowed regardless of participation in an employer's retirement program.

Spousal Eligibility

May be opened for spouse if spouse doesn't earn income.

May be opened for spouse if spouse doesn't earn income.

Annual Contribution Limits

For tax year 2011 - Either $5,000 or 100% of earned income (whichever is less), minus any contribution you make to a Roth IRA.

If your spouse doesn't earn income, you can contribute to a spousal IRA.

If you're at least 50 years old, you may contribute an additional $1,000.00

Same as Traditional, plus:

Contributions allowed up to the annual limit as long as your modified annual gross income (AGI) falls within income limits ($105,000 or less if you're single, $166,000 if married and filing jointly).

Distribution Requirements

Must begin to take distributions by April 1st of the year after you become 70½ years old.

No required distributions while you're alive, but your beneficiaries will be subject to distribution rules after you die.

Tax Deductions for Contributions

Fully deductible regardless of AGI¹ if you and your spouse aren't in an Employer Retirement Plan (ERP).²

Contributions are made after tax