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

Related Articles
  1. Retirement

    Traditional or Roth IRA: What's the Difference?

    Traditional IRAs and Roth IRAs have similarities and differences investors need to know.
  2. Retirement

    Why a Roth IRA May Be the Better Choice

    Both traditional and Roth IRAs are good for funding retirement, but here's why the Roth is better.
  3. Retirement

    Roth vs. Traditional IRA: Which Is Right For You?

    To answer this question, you need to consider several of the factors we outline here.
  4. Financial Advisor

    Roth IRA Vs. Traditional IRA

    Learn more about the differences between a Roth IRA and traditional IRA.
  5. Retirement

    A Layman's Guide to Traditional and Roth IRAs

    Traditional and Roth IRAs have similarities and differences, but both help you save for retirement.
  6. Retirement

    Roth IRAs: Investing And Trading Do’s And Don’ts

    Just what can you invest in in a Roth IRA? And what constitutes a prohibited transaction?
  7. Retirement

    Tips On How To Use IRAs To Boost Retirement Savings

    According to the Trustees of the Social Security Fund, the fund will be depleted by 2037. Are you ready?
  8. Retirement

    Roth IRAs: The Best Thing Since Sliced Bread?

    Opening a Roth IRA can be a good idea for these nine reasons.
Frequently Asked Questions
  1. When Does a Corporation Decide to Refinance Debt?

    Favorable market conditions or the strengthening of a credit rating may lead to corporate refinancing.
  2. What is the difference between an inter vivos trust and a testamentary trust?

    The difference between inter vivos trusts and testamentary trusts.
  3. Who are Target's (TGT) main competitors?

    Learn more about the discount retailer Target and its competitors. Find out some of the things discount retailers do to increase ...
  4. Why would a company issue preference shares instead of common shares?

    Learn about some reasons corporations might issue preference shares and why investors might value them more than common shares.
Trading Center