What is a Traditional or Rollover IRA?

A Traditional Individual Retirement Arrangement (IRA) is one of the investment options available to help individuals prepare for retirement.

For tax year 2008, customers with earned income may contribute up to $5,000 per year (or 100% of their earned income, whichever is less) to their IRAs, and individuals age 50 or older may contribute up to $6,000 annually.

For tax year 2009, customers with earned income may contribute up to $5,000 per year (or 100% of their earned income, whichever is less) to their IRAs, and individuals age 50 or older may contribute up to $6,000 annually.

Contributions to a Traditional IRA may be tax-deductible, depending on eligibility, and owners are required to begin taking distributions upon reaching age 70½.

Note: Contribution limits indicate the total amount a taxpayer may annually contribute to their combined IRA accounts. For specific or tax-related questions about Traditional IRAs, please consult a tax advisor and review IRS publication 590.

A Rollover IRA is an account that is used to hold assets that were previously held in an employer’s retirement plan, like a 401(k). There is no limit on the amount you can rollover.

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