Longer life expectancies and early retirements make sound investment strategies essential. With an increasing number of choices and ever-changing tax laws, here are some of the more common IRA options.

Traditional IRA

• The most basic IRA available. Provides tax deferred growth and potential for deductible contributions.
• Eligibility—Individuals under the age of 70 1/2 with earned income.
• Contribution guidelines—Deductible contribution limits depend upon the individual's participation in an employer-sponsored plan and modified adjusted gross income, but cannot exceed $5,000 for 2008. Consult the IRS Publication 590 for a current schedule of income limits for IRA deductibility.

Additional "catch-up contributions" of $1,000 are allowed for people age 50 and over.

• Contribution timeframes—The account must be set up and contributions are generally made by April 15 in order to deduct qualifying contributions for the previous tax year.

• Distribution rules—Withdrawals before age 59 1/2 are subject to income tax and a 10% penalty. The penalty is not assessed in special situations and for qualified expenses. Required Minimum Distributions (RMD) must begin by April 1 of the year following the year the individual reached age 70 1/2.

RMDs are based upon life expectancy as determined by the Uniform Table located in IRS Publication 590.

Roth IRA

• Offers non-deductible contributions to eligible individuals. Provides tax deferred growth and the potential for tax free distributions.
• Eligibility—Individuals with earned income and whose modified adjusted gross income is within specific limits.
• Contribution guidelines—Contributions are not deductible. Maximum contributions depend upon the individuals modified adjusted gross income, but cannot exceed $5,000 for 2008.

Additional "catch-up contributions" of $1,000 are allowed for people age 50 and over.

• Contribution timeframes—The account must be set up and contributions are generally made by April 15 of the following tax year.

• Distribution rules—Withdrawals before age 59 1/2 are generally subject to both income tax and a 10% penalty, except in special situations and for qualified expenses.

The earnings portion of the account may be withdrawn tax and penalty free after the account has been open for five years and one of the following conditions have been met:

1. You have attained age 59 1/2
2. Upon death or disability
3. The distribution is used for a qualified first-time home purchase subject to restrictions

A distribution of Roth contribution amounts may occur at any time and is not taxed or penalized.

Distributions are not mandatory at any age.

Roth Conversion IRA

• A Roth IRA can be established and/or funded by converting your traditional IRA assets into a Roth IRA.
  
  Taxes may be due for the tax year in which the conversion is made.
• Eligibility—Single individuals or married individuals filing jointly with adjusted gross income of $100,000 or less. (This $100,000 will be removed in 2010.)
• Contribution guidelines—Conversion amounts are not deductible and they are generally included in the individual's gross income. The 10% penalty does not apply.

There is no limit on the amount. Subsequent contributions to the Roth IRA are capped at $5,000 for 2008.

Additional "catch-up contributions" of $1,000 are allowed for people age 50 and over.

• Contribution timeframes—The account may be established whenever the conversion from traditional IRA to Roth IRA is desired.

• Distribution rules—Withdrawals before age 59 1/2 are generally subject to both income tax and a 10% penalty, except in special situations and for qualified expenses.

Distributions are not mandatory at any age.

IRA Rollover

•  A traditional IRA used by individuals who want to continue their retirement savings after closing an employee-sponsored retirement account.
• Eligibility—Individuals with distributions from an employer-sponsored plan.
• Contribution guidelines—Rollover contributions are not deductible and they are not included in the individual's gross income.

There is no limit on the initial rollover contribution amount. Subsequent contributions are capped at $5,000 for 2008.

Additional "catch-up contributions" of $1,000 are allowed for people age 50 and over.

• Contribution timeframes—To avoid income taxation, the account must be set up and contributions made within 60 days of receiving the distribution from the employer-sponsored account.

• Distribution rules—Withdrawals before age 59 1/2 are subject to income tax and a 10% penalty. The penalty is not assessed in special situations and for qualified expenses.

Distributions must begin by April 1 of the year following the year the individual reached age 70 1/2. Distributions are based upon life expectancy as determined by the Uniform Table.