AARP PRODUCTS & SERVICES
HEALTH
FINANCIAL
TRAVEL
DISCOUNTS
INSURANCE
|
AARP.ORG HOME |
 Join AARP
|
IRA Help CenterAn Individual Retirement Account (IRA) is an account designed to offer the potential for tax-advantaged growth of your retirement savings. The two types of IRAs are Roth and Traditional. Compare Your IRA choices.
The Traditional IRA allows your retirement savings to grow tax-deferred and in some cases the amount of your contributions are deductible from your income tax. Anyone under the age of 70½ with earned income can invest in a Traditional IRA. Your non-working spouse may also be eligible to make contributions depending upon your earned income level. For tax year 2007 you can invest up to $5,000 in a Traditional IRA if you are 50 or over or up to $4,000 if you are under age 50. For 2008 you can invest up to $6,000 if you are over age 50 or $5,000 if you are under age 50.
A Roth IRA is available to anyone at any age and also allows your earnings to grow tax-free. Although your contributions are not tax-deductible, contributions to a Roth IRA can be withdrawn at any time without being subject to penalty or tax. Earnings are free from federal tax if they are withdrawn after age 59½ and the account has been open for more than 5 years.
AARP Financial Inc. does not provide tax advice. Please consult a tax advisor for information pertaining to your particular situation.
A Rollover IRA is an IRA designed for people who have assets in a previous employer's retirement plan such as your 401(k), 403(b) or 457. Assets in these plans may be moved directly into an AARP Funds Rollover IRA without incurring any tax consequences. Any earnings growth will be tax-deferred.
