Individual Retirement Accounts (IRA)

An Individual Retirement Accounts (I.R.A.) allows one to put away 100% of pay, to a maximum of $4,000 per spouse, per family.

• Contributions are deductible from federal taxes.
  
  
• Withdrawals prior to age 59 incur a 10% penalty tax, plus regular income tax.
  
  
• I.R.A. contributions are not always deductible if a person or his/her spouse participates in a qualified retirement plan at work.
  
  
• Withdrawals prior to age 59.5 are allowed for certain limited exceptions:
  - You were permanently or totally disabled
  - You were unemployed and paid for health insurance premiums
  - You paid for college expenses for your self or a dependent
  - You bought a house (The limitations to this exception are as follows: you did not own a home in the previous two-years, and only $10,000 of the retirement distribution qualifies to avoid the tax penalty.)
  - You paid for medical expenses exceeding 7.5% of your adjusted gross income