REWahoo
Give me a museum and I'll fill it. (Picasso) Give
Bankrate.com has a simplified comparison of the + and - of various types of retirement accounts:
Traditional IRA
May qualify for tax deduction
Can contribute up to $4,000 in 2006 ($5,000 if you're 50 and older)
Can take money out for qualified events without penalty
Taxed as income when you start taking distributions
Can start taking money regularly at 59½
Have to start taking money out at 70½
Can't contribute after 70½
Roth IRA
Can contribute up to $4,000 in 2006 ($5,000 if you're 50-plus)
No tax deduction
Can take out the money you've contributed at any time without penalty
Can withdraw earnings after five years for qualified events
Money not taxed when you take it out at retirement
Don't have to take distributions at 70½
Can contribute past 70½
Income limit: $95,000 to $110,000 for singles; $150,000 to $160,000 for married couples
401(k)
Contributions taken out of paycheck.
Can save up to $15,000 in 2006 ($20,000 if you're 50-plus)
Can retire as early as 55
Don't have to take distributions at 70½
Can contribute past 70½
Federally protected from creditors
Limited to the plan your employer designs/selects
May or may not be able to borrow
May or may not have matching contributions from employer
Matching may be vested
SIMPLE IRA
Contributions taken from paycheck.
Can contribute 100 percent of income up to $10,000
Employer matching
Immediately vested
Option for self-employed
SEP-IRA
Employees can contribute up to $44,000 in 2006
Functions like an IRA
Option for self-employed
No annual reporting
Solo 401(k) Can contribute 100 percent of income up to $15,000 in 2006 ($20,000 if you're 50-plus)
Option for self-employed
Additional paperwork and tax forms required
http://biz.yahoo.com/brn/060110/18075.html?.v=1
Bankrate goes into more detail about each type of account here: http://biz.yahoo.com/brn/060110/18074.html?.v=1
Traditional IRA
May qualify for tax deduction
Can contribute up to $4,000 in 2006 ($5,000 if you're 50 and older)
Can take money out for qualified events without penalty
Taxed as income when you start taking distributions
Can start taking money regularly at 59½
Have to start taking money out at 70½
Can't contribute after 70½
Roth IRA
Can contribute up to $4,000 in 2006 ($5,000 if you're 50-plus)
No tax deduction
Can take out the money you've contributed at any time without penalty
Can withdraw earnings after five years for qualified events
Money not taxed when you take it out at retirement
Don't have to take distributions at 70½
Can contribute past 70½
Income limit: $95,000 to $110,000 for singles; $150,000 to $160,000 for married couples
401(k)
Contributions taken out of paycheck.
Can save up to $15,000 in 2006 ($20,000 if you're 50-plus)
Can retire as early as 55
Don't have to take distributions at 70½
Can contribute past 70½
Federally protected from creditors
Limited to the plan your employer designs/selects
May or may not be able to borrow
May or may not have matching contributions from employer
Matching may be vested
SIMPLE IRA
Contributions taken from paycheck.
Can contribute 100 percent of income up to $10,000
Employer matching
Immediately vested
Option for self-employed
SEP-IRA
Employees can contribute up to $44,000 in 2006
Functions like an IRA
Option for self-employed
No annual reporting
Solo 401(k) Can contribute 100 percent of income up to $15,000 in 2006 ($20,000 if you're 50-plus)
Option for self-employed
Additional paperwork and tax forms required
http://biz.yahoo.com/brn/060110/18075.html?.v=1
Bankrate goes into more detail about each type of account here: http://biz.yahoo.com/brn/060110/18074.html?.v=1
