There are two types of Individual Retirement Account (IRA) - Traditional and Roth. Each has unique eligibility rules and tax treatment, but the contribution limits are identical. Catch-up limits also apply to both IRA types and are available to those aged 50 and older. These amounts are scheduled to rise over time as shown below:

YEAR Contribution Catch-up
2005 $4,000 $500
2006-2007 $4,000 $1,000
2008 $5,000 $1,000
2009 Indexed for inflation $1,000


Look Out!
The limits above apply jointly to both Traditional and Roth IRAs. For example, a 40-year-old client can contribute a total maximum of $4,000 in 2005 - so he or she could contribute $1,000 to a Traditional IRA and $3,000 to a Roth IRA, but not $4,000 to each.

Not all types of investments are permitted within IRAs. Permissible investments include stocks, bonds, mutual funds, annuities, government securities and gold or silver coins minted by the U.S. Treasury. Other investments such as collectibles, insurance policies, art and other types of coins are not permitted.

Traditional IRA

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