| |
TRADITIONAL IRA |
ROTH IRA |
EDUCATION IRA |
|
Adjusted Gross Income Eligibility |
Anyone under age 70 1/2 with any amount of earned income |
Anyone of any age with a maximum AGI of $122,000 (single) or $179,000 (joint) |
Anyone of any age with a maximum AGI of $110,000 (single) or $220,000 (joint) |
|
Contributions |
Contribution limits will be assessed for a potential increase in $500 increments based on inflation beginning in 2009. In addition, there is a supplemental limit for persons who have reached age 50.
|
Year
|
General Limit
|
Limit for 50 & Older
|
|
2009-2011
|
$5,000
|
$6,000
|
A non-working spouse may also contribute up to the above limit per year
|
Contribution limits will be assessed for a potential increase in $500 increments based on inflation beginning in 2009. In addition, there is a supplemental limit for persons who have reached age 50.
|
Year
|
General Limit
|
Limit for 50 & Older
|
|
2009-2011
|
$5,000
|
$6,000
|
A non-working spouse may also contribute up to the above limit per year
The limit is phased out for single persons earning between $107,000-$122,000 and married couples earning between $169,000-$179,000
|
Up to $2,000, per child, per year
The limit is phased out for single persons earning between $95,000-$110,000 and married couples earning between $190,000-$220,000
|
|
Deduction Eligibility |
Fully or partially tax-deductible depending on AGI and/or enrollment in an
employer retirement plan
|
Not tax-deductible |
Not tax-deductible |
|
Tax Benefits |
Earnings grow tax-deferred until withdrawn |
Earnings grow tax-free if the account has been opened and funded for at least 5
years |
Earnings grow tax-free for qualified education expenses |
|
Penalty-Free Withdrawal of Earnings |
No IRS penalty before age 59 1/2 for qualified education expenses, up to $10,000 of first home purchase expenses, qualified medical expenses, or if the owner becomes disabled
No IRS penalty after age 59 1/2 for any reason |
No IRS penalty before age 59 1/2 for qualified education expenses, up to $10,000 of first home purchase expenses, qualified medical expenses, or if the owner becomes disabled
No IRS penalty after age 59 1/2 for any reason
Regardless of age, the account must be opened and funded for at least 5 years
for earnings to be withdrawn tax-free. |
No IRS penalty at any age for qualified education expenses |
|
Transfers and Rollovers |
Allowed to and from Traditional IRAs or from employer plans |
Traditional, SIMPLE, SEP, and Qualified Plan assets may be converted into a Roth IRA.
|
Allowed to another Coverdell ESA for another family member. For more details, see IRS Publication 970 |
