TRADITIONAL IRA

Earnings are tax deferred until withdrawn, certain contributions are tax deductible in the year they are made.

ELIGIBILITY:

ROTH

Features tax free withdrawals for certain distributions, following a five year holding period. Contributions to a Roth are non-deductible and taxed in the year they are earned. People who expect to be in a higher tax bracket when they retire, may benefit more from this type of IRA than a Traditional IRA.

ELIGIBILITY:

You or your spouse must have earned income and your MAGI (modified adjusted gross income) cannot exceed certain limits. Contributions can be made even if you are over 70 1/2, if you meet the other rules of eligibility.

HEALTH SAVINGS (HSA)

They have all the benefits of an IRA but they have a plus side. An eligible individual may establish an HSA account, make fully deductible contributions and take tax free distribution for qualified medical expenses. The person is not disqualified because of income or participation in a 401(k), and there is no required minimum distribution at age of 70 1/2.

ELIGIBILITY:

Contributions can be made only on behalf of an individual who is covered under a high-deductible health plan, and is not covered by another health plan that is not a HDHP. The individual cannot be enrolled in Medicare and cannot be eligible to be claimed as a dependent on another individual's federal income tax return.

EDUCATION

A non-deductible account that features tax-free withdrawals for a child's higher education expenses. Distributions are penalty free and tax free.

ELIGIBILITY:

There are two eligibility rules for Education IRA's. The child for whom you are making the contribution may not have had any contributions made on their behalf to a State prepaid tuition plan during that year. The contributors modified adjusted income (MAGI) cannot exceed certain limits.

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