TRADITIONAL IRA

A Traditional IRA has been the most common type of IRA until the intrduction of the Roth in 1998.  Here is some basic information on the Traditional IRA.

• Contributions to Traditional IRA's are tax deductible.
• Earnings, upon withdrawal, are subject to federal income tax.
• All distributions are taxed as ordinary income. 
• Contributions in 2008 are limited to $5000 for those 49 and under and $6000 for those over 50.
• An early withdrawl penalty applies for any distribution before age 59 1/2 (certain exceptions exist.)
• Required withdrawls begin at age 70 1/2.