Traditional IRA

- Allows your earnings to grow tax deferred, so you won’t owe income taxes until you make withdrawals.

- If you’re eligible*, your contributions are tax deductible.

- IRS penalty-free withdrawals are allowed prior to age 59 ½ (up to a lifetime limit of $10,000) when the funds are used for qualifying expenses.**

To qualify to make tax-deductible contributions to a traditional IRA you must be less than 70½ years old and have received income from compensation.

$5,000
($6,000 ages 50+)

Roth IRA

- Roth IRAs offer tax-free growth and more flexible withdrawal rules.

- Withdraw contributions penalty- and tax-free at any time. Not required to start withdrawals at age 70½.

- After the account has been open five tax years, earnings can be withdrawn tax-free and penalty-free for any of these reasons: age 59½, disability, death, or a first-time home purchase.

Anyone who falls withing the Modified Adjusted Gross Income limits set by the governement.*

$5,000
($6,000 ages 50+)

Coverdell Education Savings Account

- Contributions are never tax-deductible.

- Withdrawals from a Coverdell ESA are both tax-free and penalty-free if used for qualified education expenses.

You can contribute the full amount if you are a single filer with a modified adjusted gross income of $95,000 or less ($190,000 or less for joint tax filers).*

Total contributions each year to each child's Coverdell ESA can't exceed $2,000.