IRA's

    An IRA is an INDIVIDUAL RETIREMENT ACCOUNT. An IRA is a personal savings plan that provides income tax advantages to individuals saving money for retirement purposes. (Consult your tax professional for further details.)

TRADITIONAL IRA
    The amount of your contribution that will be deductible on your income tax return is dependent upon your Adjusted Gross Income (AGI) and whether you are covered under an employer sponsored qualified retirement plan. Thus, depending on your filing status (Single, Joint, etc), and your AGI, your contributions may range from fully deductible to totally non-deductible. Even though you are eligible to contribute to your IRA, you may be in a position where none of these contributions are deductible.

EDUCATION IRA
    The money grows tax-free and has preferential tax treatment upon distribution to the beneficiary who uses it for qualified educational expenses. These plans are not very common because they are very restrictive on who can make contributions to them, the amount of total contributions allowable each year, and the limitations on what exact education expenses qualify. Your financial planner should be able to assist you in evaluating what savings plan you should undertake to prepare for higher education costs. Furthermore he/she should review many of the tax-sheltered savings plans now sponsored by the various states, as well as benefits of non-state residents. One feature of these plans is that they can be used to fund private education before college. This is uncommon in most educational savings vehicles.

SEP IRA
Simplified Employee Pension
    This is an employer established and funded Simplified IRA, where the employer can put a percentage of your compensation into a special IRA account. Sole proprietors may establish these plans for their own benefit. They are sometimes used instead of Keogh retirement plans because they have fewer administrative and tax filing requirements.

SIMPLE IRA
    This is a rather new creation, but rapidly becoming more popular. It’s another employer sponsored and administered retirement plan. The attractive features of this plan includes the ability for the employer to establish and fund a retirement plan for the benefit of him/herself and his/her employees. Separate rules relative to required employer contributions and premature distributions apply.

ROTH IRA
    Contributions are NOT deductible when the funds are contributed, but the earnings accumulate tax-free and remain tax-free upon distribution. You cannot withdraw your funds within the first five years after the establishment of the Roth without a penalty. Given that this five year testing period can successfully be addressed by proper tax planning, the establishment and at least partial funding of a Roth IRA account should be on the discussion list of the financial advisor of every taxpayer who qualifies to open such a plan.