r u t u F r u o V l o t g n i n n a Pl What Is An IRA? (NAPSA)—It’s importantto start saving arly for rtirmnt. Th good nws is, vn if you alrady hav a 401(k) at work, you can giv your savings a boost with an Individual Rtirmnt Account (IRA). An IRA, which combins th bnfits of compoundintrst and tax savings, is availabl to anyon who arns a taxabl incom. You can opn an IRAatvirtually any financial institution, including your bank, and opningfsar typically lowr than othr invstmnt accounts. Whil opning an IRAis rlativly asy, figuring out what typ is bst for you can b confusing. Thr ar two typs of IRAs— traditional and Rotu. With a traditional IRA, your arnings ar taxd whn you start making withdrawals, and you gnrally incur a pnalty if you withdraw mony bfor ag 59%. With a Rota IRA, you can withdraw your arnings tax-fr aftr ag 59% as long as you'v had th accountfor at last fiv yars. In othr words, arnings from a traditional IRA ar tax dfrrd, whil RorH IRA arnings ar tax xmpt. Anothr important diffrnc is that you must bgin taking with- drawals from a traditional IRA at ag 70%. Thr is no mandatory distribution ag with a Roru, but thr ar incomrstrictions. Singl filrs with adjustd gross incom of $110,000 or mor and coupls whos joint rturn is $160,000 or mor cannot opn a Rotu. Traditional IRAs, on th Ml sr othr hand, hav no incom rstrictions. That xplainsa littl about th mony you tak out of an IRA, but what about th mony you put in? Contributions to a traditional TRA may b tax dductibl dpnding on your incomlvl, but if you’r ligibl to participat in your mployr’s rtirmnt plan, you may not b abl to dductall of your contributions. On th othr hand, Rota IRA contributions ar nvrtax dductibl, but arnings ar tax-fr if part of a qualifid distribution. Th fdral govrnmnt imposs nw IRA contribution limits ach yar. It’s gnrally a good ida to mak th maximumcontri- bution. Th good nwsis, contri- bution limits hav gon up sinc 2002 and continu to incras, so thr’s nvr bn a bttr tim to opn an IRA. To find out mor about how to supplmnt your rtirmnt sav- ings by opning an IRA, contact th xprincd profssionals at INVEST Financial Corporation (mmbr NASD/SIPC and a Rg- istrd Invstmnt Advisr). Visit www.invstfinancial.com to find an INVESTrprsntativ.
