IRA GUIDE FOR INDIVIDUAL INVESTORS

Traditional IRA

Roth IRA

CONTRIBUTIONS for TAX YEAR 2003

Maximum annual

Upfront tax-deductible?

• Yes, if qualified (B)

• Nondeductible

Contribution age limits

• Up to, but not after, the tax year in which you will turn 70.5 (generally, earned income required)

• Up to and after age 70.5 (generally earned income required)

Limits on AGI (adjusted gross income) or MAGI (modified adjusted gross income)

Full deduction for active participants of another retirement plan if income is:

• at or below $60,000 for married joint filers (C)
• at or below $40,000 for single filers (C)

To make maximum contribution, income must be:

• no more than $150,000 for married joint filers (D)
• no more than $95,000 for single filers (D)

DISTRIBUTIONS

Required minimum distribution applicability

• April 1 following the year owner reaches age 70.5

• Not required during IRA holder's lifetime

ELIGIBILITY

Age requirement

• An account holder must not have reached age 70.5 during the taxable year for which the contribution is made.
• Minimum age requirements for annuities are determined by individual state insurance guidelines.

Employment
requirement

• Generally, IRA owner may be any employed individual or non-working spouse.
• Generally, IRA owner must have earned income equal to or exceeding the amount of contributions.

DEADLINES

Contributions

• Tax year contributions must be postmarked by individual tax return filing deadline (usually April 15) of the following calendar year.

(A) Combined contribution to both traditional and Roth IRAs cannot exceed $3,000 annually ($3,500 for those age 50 or older). Generally, an owner's (and his or her spouse's) compensation must be equal or exceed the amount of contributions to a traditional IRA or a Roth IRA.

(B) IRA deductions may be eliminated or reduced for taxpayers who are active participants in qualified retirement plans if their AGI exceeds certain limits. For individuals who are not active participants but whose spouses are, deductibility of traditional IRA contributions is phased out if the couple's AGI is between $150,000 and $160,000, assuming taxes are filed jointly.

(C) The maximum deductible contribution is phased out for single filers with AGI between $40,000 and $50,000 and for married joint filers with AGI between $60,000 and $70,000.

(D) The maximum contribution is phased out for single filers with MAGI between $95,000 to $110,000 and for married joint filers between $150,000 to $160,000. Participation in a pension plan does not limit contributions to a Roth IRA.

(E) The maximum contribution is phased out for single filers with MAGI between $95,000 to $110,000 and for married joint filers between $190,000 to $220,000. Participation in a pension plan does not limit contributions to a Roth IRA.

(F) Remaining accounts may be rolled over to a Coverdell Education Savings Account in the name of another beneficiary in the beneficiary's family or it can be withdrawn, with the earnings being subject to income taxes and possibly a 10 percent penalty tax.