TRADITIONAL IRA

What is a Traditional IRA?
The Traditional IRA is an account that allows you to defer taxes on the earnings on your contributions until they are withdrawn. Also, certain contributions are tax deductible in the tax year for which they are made.

Am I Eligible for a Traditional IRA?
If you are younger than age 70.5 for the entire tax year and have earned income (or your spouse has earned income), you are eligible to establish a Traditional IRA.

How Much Can I Contribute Each Year?
The table below shows the aggregate amount that you can contribute to a Traditional IRA for each year.

TAX YEAR	STANDARD LIMIT	CATCH-UP AMOUNT	TOTAL LIMIT FOR AGE 50 AND OVER
2002-2004	$3,000	$500	$3,500
2005	$4,000	$500	$4,500
2006-2007	$4,000	$1,000	$5,000
2008	$5,000	$1,000	$6,000
2009 Thereafter	$5,000+COLA	$1,000	$6,000+COLA

Do I Pay Taxes on the Earnings When Distributed?
Yes. All earnings on your Traditional IRA contributions (deductible and/or non-deductible) remain tax deferred until you make withdrawals from the account. They are then taxed as income in the year they are withdrawn.