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 Related Information
• Selecting an IRA
• IRA services
• Retirement planning

Individual Retirement Accounts (IRAs)

IRAs: Tax-Advantaged Accounts for Retirement Savings

Traditional and Roth IRAs are investment accounts that are designed to provide you a tax-advantaged way to save for retirement.

When to consider an IRA
Yearly contribution limits for traditional IRAs and Roth IRAs
How A.G. Edwards can help

When to Consider an IRA

You should consider investing in an IRA if:

• Your employer (or your spouse's employer) doesn't offer a qualified retirement plan (such as a 401[k], 403[b], SEP IRA, SIMPLE IRA, or a profit sharing or pension plan)
• You're maximizing your contributions to your employer-sponsored plan and would like to save more
• You're changing jobs and need to move your assets from your former employer's qualified
retirement plan
• You want to consolidate your retirement savings for easier management

Use our IRA calculator to discover the tax-deferred benefits of investing in an IRA.

Withdrawals from a traditional IRA, and withdrawals of any earnings from a Roth IRA, prior to AGE
59 1/2 may be subject to ordinary income taxes and 10% IRS penalty.

Yearly Contribution Limits for Traditional IRAs & Roth IRAs

Because of the tax advantages available with both traditional IRAs and Roth IRAs, tax laws limit how much you can contribute every year. If you are aged 50 or older, you can contribute more to help you "catch up" on your retirement savings. (Note: The combined total of your traditional and Roth IRA contributions cannot exceed the amounts listed below.)

Year
Annual IRA Contribution Limit
 

Under age 50

Aged 50 and older*
2006 - 2007
4,000
5,000
2008
5,000
6,000
*Includes IRA catch-up contribution limit

Contribution limits after 2008 will be indexed for inflation in $500 increments. Catch-up contribution limits for those aged 50 and older will remain at $1,000.

Additional contribution limits for Roth IRAs. If you contribute to a Roth IRA for tax year 2006, your maximum contribution is limited if your modified adjusted gross income (MAGI) is between $95,000 and $110,000 for single filers or between $150,000 and $160,000 for joint filers. For tax year 2007, the MAGI phase-out range is between $99,000 and $114,000 for single filers and between $156,000 and $166,000 for joint filers.

Note: If your MAGI exceeds these amounts, you will not be eligible to contribute to a Roth IRA.

How A.G. Edwards Can Help

Developing and implementing a strategy for retirement savings can be time-consuming and complicated. Your Financial Advisor has the knowledge and resources to provide the guidance you may need or want, whether you're developing your retirement plan, trying to determine which IRA is most suitable for your situation or just selecting individual investments. Learn more about our IRA services.