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IRA & ESA Facts

  Traditional IRA Roth IRA Coverdell Education Savings Account
Qualifications Must have earned income and not have reached age 70½ by the end of the year. Must have earned income. There are no age restrictions. The designated beneficiary must be an individual under the age of 18. The age 18 limitation will not apply to any designated beneficiary with special needs.
Maximum Contributions

2013 - $5,500 
$1,000 "catch-up" contribution

2014 - $5,500  
$1,000 "catch-up" contribution 

2013 - $5,500
$1,000 "catch-up" contribution

2014 - $5,500  
$1,000 "catch-up" contribution 

2013 - $2,000 per beneficiary.
2014 - $2,000 per beneficiary. 
Note: Contributions do not count against the limits for IRAs.
 
Tax Status of Earnings Tax-deferred until withdrawal Earnings grow tax-deferred. Tax-free on qualified withdrawals Earnings grow tax-deferred. Tax-free on qualified withdrawals
Contribution Restrictions None if you are under age 70½ and have earned income. However, if you are an active participant in an employer retirement plan, your contribution may not be deductible (See tax-deduction section below).

Yes, 2013 contributions phase out between $112,000 - $127,000 for singles and $178,000 - $188,000 for married couples filing jointly.  Married filing separate phase out - $0 - $10,000

Yes, 2014 contributions phase out between $114,000 - $129,000 for singles and $181,000 - $191,000 for married couples. Married filing separate phase out: $0 - $10,000

Yes, 2013 & 2014 contributions phase out between $95,000 - $110,000 for single tax filers and $190,000 - $220,000 for joint tax filers.

If income exceeds phase-out limit, contributions are not allowed.

 

Tax Deduction Yes (See Traditional IRA Tax Deduction explanation chart below) No No
IRS Penalties for Early Withdrawal None if:
- Over 59 ½
- Death or disability
- Qualified medical expenses
- Certain health insurance
- Qualified college expenses
- 1st time home purchase (up to $10,000)
- Due to IRS levy
None if:
- Over 59 ½
- Death or disability
- Qualified medical expenses
- Certain health insurance
- Qualified college expenses
- 1st time home purchase (up to $10,000)
- Due to IRS levy
None if:
- For payment of qualified education expenses
Required Distributions Must begin by April 1 following year participant turns 70 ½ Only after death of the participant Must be completed 30 days after beneficiary reaches age 30 (except for special needs children) or death
Contribution Age Limit Not allowed after the year age 70 ½ is attained None Not allowed after attaining age 18 except for special needs children
Traditional IRA Tax Deduction explanation. Contributions up to the limit are fully tax-deductible if you are not an active participant in an employer-sponsored retirement plan. If you are an active participant and a single tax filer, your deductibility phase-out range for tax year 2013 is $59,000 - $69,000. For tax year 2014, the deductibility phase-out range is $60,000 - $70,000.  If you are married and filing a joint return, your deductibility phase-out range for tax year 2013 is $95,000 - $115,000 and for 2014 is $96,000 - $116,000.  Note: If your spouse is not an active participant, such spouse is subject to a separate deductibility phase-out range of 178,000 - $188,000 for 2013 and $181,000 - 191,000 for 2014.

Not yet an IRA owner?   or your existing IRA. 

Learn more about our IRA rates.

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