Traditional IRAs
Traditional IRAs are now more attractive then ever. Expanded income limits mean that more people are now able to make tax-deductible contributions. In addition, penalty-free withdrawals are allowed for higher education expenses and first-time home purchases, as well as some other high-need reasons.

Telhio offers both IRA Share Certificates of Deposit, which can be opened with a minimum of $500 for terms of 3 months to five years, or IRA Savings accounts, to use for interim savings. Click here for eligibility requirements.

Tax -Year 2002 and Beyond
Contribution limits increase each year through 2008 and are subject to cost-of-living adjustments (COLA) each year thereafter. In addition to a contribution limit increase, those IRA owners who have attained age 50 may contribute an additional amount, allowing them to "catch up" on their retirement savings. The following chart shows the contribution limits in effect after tax-year 2002. Click here for more detailed information.

Deductibility
You may or may not be allowed to deduct your regular/spousal IRA contribution on your income tax return. Transfer and rollover contributions are not deductible. Whether or not you may deduct your contribution depends upon whether you (or in some limited situations, your spouse) are an active participant in an employer-maintained retirement plan, your income level, your income tax filing status, and the tax year for which you are making the contribution. If you are single and not an "active participant," your IRA contributions will be fully deductible. If you are married, and neither you nor your spouse is an "active participant," your IRA contributions are fully deductible. Click here for more detailed information.

Distribution

• IRA owners will no longer choose to recalculate or not to recalculate life expectancy.
• Most IRA owners will use the Uniform Distribution Period table for RMD calculations.
• Naming a beneficiary prior to the required beginning date (RBD), or changing beneficiaries during the distribution years, will generally not have an impact on RMD amounts.

Penalty-Free Distributions
As a general rule, distributions prior to age 59 1/2 will incur an IRS 10 percent premature-distribution penalty. However, both the traditional and Roth IRA allow the following IRS penalty-free distributions, regardless of the type of asset that is distributed (e.g., contribution or earnings). Click here for more detailed information.