Traditional IRA

Contributions

Regular: If you have earned income, and are under age 70 1/2, you may contribute up to 100% of your earned income, up to $5000 in 2008 and $5000 plus CoLA in 2009. If your spouse has earned income, and is under age 70 1/2, your spouse may contribute up to 100% of his/her earned income, up to $5000 in 2008 and $5000 plus CoLA in 2009.

Spousal: If your spouse is under age 70 1/2 and has little or no earned income, you may make a spousal contribution to your spouse's IRA. You may contribute up to 100% of your combined earned income, up to $10000 in 2008 and $10000 plus CoLA in 2009. No more than $5000 may be contributed to either spouse's IRA in 2008 and no more than $5000 plus CoLA in 2009.

Catch-up: Additional contributions of $1000 per year can be made by anyone aged at least 50 by tax year end.

Phaseout MAGI Thresholds

Depositing Money in Your IRA

Annual contributions - You may, you don't have to, deposit up to $5000, or up to 100% of your earned income, whichever is less, each year.

Rollovers - Eligible rollover distributions may be rolled over to an IRA in one of two ways:

1. Direct rollover.
2. Distribution to you and subsequent rollover.

You may authorize the plan administrator to directly roll over all or part of the eligible rollover amount. Remember, however, that any eligible rollover distribution that is paid to you, rather than directly rolled over, may be subject to the mandatory 20% federal income tax withholding. The amount you directly roll over continues to be tax-deferred; the amount you do not roll over will be taxable and, if you are under age 59 1/2, may be subject to the IRS 10% penalty on early distribution.

Transfers - A transfer is a tax-free way to move cash or other assets from one IRA to another. In a transfer, the distribution is not payable to you, but to the new IRA trustee or custodian. Since you do not receive the IRA funds, the transaction is not reported to the IRS. You may transfer all or part of your IRA to a new trustee or custodian. And, since there is no limit to the number of times you can transfer, if you have several investments within your IRA, you can choose the best time to transfer funds.

Withdrawing Money from Your IRA

You may withdraw money from your IRA at any time. The taxable portion of the withdrawal will be taxed as ordinary income. If you are under age 59 1/2, you may have to pay an IRS-imposed penalty equal to 10% of the taxable portion of the money you withdraw.

The 10% IRS penalty is not charged for withdrawals after age 59 1/2, if you become disabled, for certain medical expenses, or if you take money out systematically over a period of years based on your life-expectancy. If you die, your beneficiary may withdraw money from your IRA without this penalty.

Distributions at Age 70 1/2

You are not required to take a Required Minimum Distribution(RMD) from your IRA for tax year 2009. This one year waiver of the RMD applies to traditional IRA owners age 70 1/2 or older, and to beneficiaries of deceased traditional and Roth IRA owners. IRA owners, age 70 1/2 in 2008, who delayed taking their 2008 RMD are still required to take that distribution by April 1, 2009. The temporary waiver of the RMD rule is a provision of the Worker, Retiree, and Employer Recovery Act of 2008, and applies only to tax year 2009.

You must begin to receive minimum distributions from your IRA when you reach age 70 1/2 and every year thereafter. Unless you made nondeductible contributions to your IRA, all amounts received by you will be taxable to you. Your first distribution must be made by April 1 of the year following the year you reach age 70 1/2. Subsequent distributions must be taken by December 31 of each year.