Traditional IRAs
An interest-bearing retirement account for individuals under the age of 70½ who want to build a tax-deferred fund to supplement retirement income.

• Often contributions are deductible
   

• Earnings grow tax-deferred until withdrawn
   

• Distributions are generally taxable, but penalty-free if withdrawn under one of the following circumstances:

• Attaining the age of 59½

• Incurring a disability

• Payment for first home purchase

• Taking equal periodic payments, or

• Death (payments to beneficiaries).

• Distributions are required to be taken by Traditional IRA holders beginning at age 70½
   

• Maximum contribution for 2009 is $5,500 per year (maximum contribution is $6,500 per year for those 50 and older).

Roth IRAs
An interest-bearing account for individuals who want to supplement Social Security.

• Contributions are never deductible
   

• Earnings grow tax-free
   

• Contributions can generally be distributed tax-free at any time
   

• Earnings can be distributed tax-free if the Roth IRA holder first made a Roth IRA contribution at least 5 years ago AND one of the following events occurs:
   

  • Attaining the age of 59½

  • Incurring a disability

  • Purchasing a first home, or 

  • Death (payments to beneficiaries).
     

• Distributions are not required to be taken by Roth IRA holders at age 70½
   

• Maximum 2009 contribution to a Roth IRA is $5,500 per year (maximum contribution is $6,500 per year for those 50 and older)