How Individual Retirement Accounts (IRAs) work
Clearing up the confusion

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You can be any age, but there are certain income limits. These include:
 
• $95,000-110,000 for single filers
 
• $150,000-160,000 if you’re filing jointly

You must be 70 1/2 or under. A working spouse may also be eligible.

• $4,000 per year if you’re under age 50
 
• $5,000 per year if you’re over age 50

• $4,000 per year if you’re under age 50
 
• $5,000 per year if you’re over age 50

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Earnings grow tax-free if the account is five years old and you’re 59 1/2, a first-time homebuyer or you become disabled or die.

• Earnings are non-deductible.
 
• A 10% penalty may apply if you withdraw money before age 59 1/2.
 
• Penalty is waved for education, medical or first-time home expenses (up to $10,000).

Earnings grow tax-deferred until time of withdrawal.

• Earnings may be tax deductible based on income.
 
• A 10% penalty may apply if you withdraw money before age 59 1/2.

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No mandatory distributions.

Must withdraw money at age 70 1/2.