Individual IRA

A traditional IRA may be fully or partially deductible, depending on your income level and whether or not your are considered an "active" participant in an employer sponsored plan. Deductibility is available on a sliding scal basis if your are an "active participant."

The traditional IRA is a convenient savings vehicle for retirement. If the contributions are deductible, the contributions and earnings will be taxable when withdrawn. If you begin withdrawals after age 59 1/2, your tax rate will probably be lower. If you make withdrawals prior to age 59 1/2, you may be able to do so without penalty if:

1. The withdrawal is for qualified higher education expenses (tuition, books, room and board, etc.) for yourself, your spouse, your child or your grandchild.
2. If up to $10,000 is withdrawn for first time home purchases. These withdrawals would be subject to ordinary income tax and may also be subject to early withdrawal penalties.