What is an IRA?

An IRA is an Individual Retirement Account.Which means that it’s a tax-deferred retirement account for an individual that wants to set money aside for them when their done working. http://www.wisegeek.com/what-is-an-ira.htm

How does an IRA work?

An individual retirement account allows Americans to enjoy substantial tax benefits on retirement savings. http://www.ehow.com/how-does_4567185_an-ira-work.html

What are IRAs invested in?

They can be invested in any type of publicly traded security, including stocks, bonds, and mutual funds.http://news.morningstar.com/classroom2/course.asp?docId=4441&page=2&CN=

What are the different types of IRAs?Traditional IRA: You can contribute up to $2,000 per year into an IRA. The amount of this contribution that is deductible on your income tax return depends on your Adjusted Gross Income (AGI) and whether you are covered under an employer sponsored qualified retirement plan. Roth IRA: Contributions are NOT deductible when the funds are contributed, but the Roth IRA earnings accumulate tax-free and remain tax-free upon distribution. To be eligible to contribute, your Adjusted Gross Income must be under $95,000 for singles and $150,000 for married couples, as of December 2000. You cannot withdraw your funds within the first 5 years after the establishment of the Roth without a penalty. SEP IRA: This is an employer established and funded Simplified IRA, where the employer can put up to 15% of your compensation into a special IRA account. http://www.ira.com/faq/faq-03.htm

Is there any insurance on IRAs?

There is no way to make a tax-free transfer of the balance from an IRA to a life insurance policy. The tax must always be paid.http://www.annuityadvantage.com/irataxbomb.htm

Who is eligible to open an IRA?

Anyone can open an IRA, if young adults want to open an IRA you would need to have a family member that could bring you. http://www.ira.com/faq/faq-04.htm

How much can I contribute to my IRA?

It changes every year depending on which IRA you use. Traditional and Roth IRA : Individuals under 50 can contribute $5,000 and people over 50 can contribute up to $6,000.SEP IRA: people can contribute up to 25% of your total income to your SEP IRA. http://www.life123.com/career-money/savings-retirement/IRA/how-much-money-can-i-contribute-to-my-ira.shtml

I am leaving a company and taking my 401K proceeds. How much time do I have to deposit them in an IRA before they are

taxed as income? You have 60 days to roll over your distribution if the money was given to you. The best way to do this is to have the company administrator write a check to the IRA ROLLOVER account directly, this makes sure that nothing is withheld in taxes, and is much cleaner. Keep in mind that you can do only one rollover per year.

http://www.ira.com/faq/faq-07.htm

Can I have more then one IRA?

Yes you can.http://www.ehow.com/facts_6328170_benefits-multiple-iras_.html

What fees are associated with IRAs?

There's not really many, the popular one is the management fees, which you pay $40/month.http://forums.kiplinger.com/showthread.php?t=4807

Can I sell the stock in my brokerage account and then but it in my IRA?

An IRA can buy different things like stocks and bonds, but there are many restriction set by the federal government on things that cannot be bought such as collectibles. http://www.mutualfundsnews.com/can-i-buy-individual-stocks-in-my-ira-or-just-mutual-funds

Are educational and 529 the same?

An educational IRA is a savings plan for higher education.A 529 Plan is an education savings plan.So I would say they are the same because they all have to do with education.

What happens when I contribute too much in my IRA?

The average amount you should have in your IRA is $12,000.If you have had an account for 15 years or more years you add more to your IRA. http://www.querycat.com/question/a7b54e2d0f6a14dbab10972ec689cc20

What are the implications for my estate if I have my investments in my IRA?

You must wait until 59 ½ year of age before you can take money from a traditional IRA otherwise there is a 10% penalty. http://www.retireearlyhomepage.com/wdraw59.html

What are the benefits of making a conversion from a Traditional IRA to a Roth IRA?

Traditional IRA benefits is: you can deduct all your IRA contributions from your income. That means you don’t pay tax on the amount you contribute until you withdraw money from the account during retirement. Roth IRA benefits is: there’s no age deadline for making contributions—you can put money in it for the rest of your life. The benefits from a traditional IRA to Roth IRA are very good because you can put money in your Roth IRA for as long as you want and you can at any age.

http://moneygirl.quickanddirtytips.com/what-is-the-difference-between-a-traditional-and-roth-IRA.aspx

What are the disadvantages from a Traditional IRA to a Roth IRA?

Disadvantages for a Traditional IRA is: it requires IRA holders to withdraw a certain portion of their funds, if they needed more they can’t take as much out as they need. Disadvantages for a Roth IRA is: Not everyone qualifies for a Roth IRA because of the income limits.

http://cashmoneylife.com/2008/02/06/traditional-ira-vs-roth-ira/

How do you decide if a IRA is right for you?

IRAs is right for anyone you just need to decide which one is the right one for you to use. There's Traditional IRA, Roth IRA, SEP IRA and many more and each is for a different use.

How do I open an IRA?

The first thing that you should do is to find and select a bank for your IRA. Once you have selected a bank, you need to fill out all the necessary forms to open the IRA.Once you have the account number, you should set aside money so that you can deposit it into your IRA account. After funding your IRA, make sure you give the necessary instructions to the bank to invest the money.http://ezinearticles.com/?Simple-Steps-on-How-to-Open-an-IRA&id=1747950

What is an IRA rollover or conversion? When do I need to do this?

(rollover) The movement of IRA funds from one IRA provider to the account owner, and then to another IRA provider.60 days to complete this transaction before the transaction is considered a taxable distribution of funds.http://www.google.com/search?hl=en&rlz=1R2GGLD_enUS387&defl=en&q=define:ira+rollover&sa=X&ei=tfYRTcueE4L6lwfX4vDVCw&sqi=2&ved=0CCsQkAE

Can I borrow funds from my IRA?

Yes you can borrow money out of your IRA for example you can pull out money for a short term, you can take this money for 60 days have to put it back into your IRA account. http://www.fivecentnickel.com/2007/09/12/borrowing-money-from-an-ira/

Do you pay taxes on money in an IRA? If so, when and how much?

(traditional IRA) you don't pay taxes until you withdraw your funds (Roth IRA) you pay your taxes upfront, which means your Roth IRA contributions are made with regularly taxed income. http://www.life123.com/career-money/savings-retirement/IRA/when-do-you-pay-taxes-on-a-roth-ira.shtml

Other information on an IRA.

How many IRAs can you have? You can have both Traditional and Roth IRAs.What's the average age people usually start an IRA? Around 18 years old.

Quiz

What is an IRA?How does an IRA work?What are the different types of IRAs?What are IRAs invested in?What’s the age that allows you to open an IRA account?

Answers for quiz

An IRA is an Individual Retirement Account.An individual retirement account allows Americans to enjoy substantial tax benefits on retirement savings. Traditional IRA, Roth IRA, SEP IRAThey can be invested in any type of publicly traded security, including stocks, bonds, and mutual funds.

Anyone can open an IRA, if young adults want to open an IRA you would need to have a family member that could bring you.

What does FDIC stand for?

Federal Deposit Insurance CorporationIt is a government agency that insures savings, checking, CD and IRA accounts up to $250,000 until 2014 and then reverts to $100,000 in coverage for the same accounts.

Similarities and differences in detail of the different types of IRAS.

Similarities exist between the accounts such as the ability to use funds to purchase securities in order to build wealth and value in the account. Unlike a Roth account, principal contributions made to a traditional account can be withdrawn without penalty in most cases. For a Roth, the penalty can be as high as 10% not including money owed to the IRS for taxes.http://ezinearticles.com/?Similarities-and-Differences-Between-Roth-and-Traditional-IRA-Accounts&id=4645047

Roth Versus Traditional IRAshttp://beginnersinvest.about.com/cs/iras/f/tradvsrothira.htm

RothContributions are not tax deductible No Mandatory Distribution Age All earnings and principal are 100%

tax free if rules and regulations are followed

Funds can be used to purchase a variety of investments (stocks, bonds, certificates of deposits, etc.)

Available only to single-filers making up to $95,000 or married couples making a combined maximum of $150,000 annually.

Principal contributions can be withdrawn any time without penalty (subject to some minimal conditions).

TraditionalTax deductible contributions

(depending on income level) Withdraws begin at age 59 1/2 and

are mandatory by 70 1/2. Taxes are paid on earnings when

withdrawn from the IRA Funds can be used to purchase a

variety of investments (stocks, bonds, certificates of deposits, etc.)

Available to everyone; no income restrictions

All funds withdrawn (including principal contributions) before 59 1/2 are subject to a 10% penalty (subject to exception).

THE BIGGEST DIFFERENCEhttp://beginnersinvest.about.com/cs/iras/f/tradvsrothira.htm

Tax Deferred vs. Tax Free“The biggest difference between the Traditional and Roth IRA is the way the U.S. Government treats the taxes. If you earn $50,000 a year and put $2,000 in a traditional IRA, you will be able to deduct the contribution from your income taxes (meaning you will only have to pay tax on $48,000 in income to the IRS). At 59 1/2, you may begin withdrawing funds but will be forced to pay taxes on all of the capital gains, interest, dividends, etc., that were earned over the past years. On the other hand, if you put the same $2,000 in a Roth IRA, you would not receive the income tax deduction. If you needed the money in the account, you could withdraw the principal at any time (although you will pay penalties if you withdraw any of the earnings your money has made). When you reached retirement age, you would be able to withdraw all of the money 100% tax free. The Roth IRA is going to make more sense in most situations. Unfortunately, not everyone qualifies for a Roth. A person filing their taxes as single can not make over $95,000. Married couples are better off, with a maximum income of $150,000 yearly. “

Is an IRA the same as a 529 plan?

A 529 plan is not the same as a IRA because a 529 plan is used when parents save money up for their children for college. A IRA is a Individual Retirement Account and is used to save money for retirement.

What is the maximum amount you can put yearly into each IRA.

Currently it is $5000 for under 50 and $6000 if over.http://wiki.answers.com/Q/How_much_can_you_put_yearly_into_a_Roth_IRA#ixzz1CAIh3OXI

You cannot contribute to a ROTH IRA if you do not work and you cannot contribute more than you make. So if you have a summer job making $1,000, that would be the maximum you can contribute your ROTH IRA.http://www.ehow.com/how_2089595_determine-maximum-roth-ira-contribution.html

What is the maximum income you can make in order to be able to invest in a Roth IRA?

Available only to single-filers making up to $95,000 or married couples making a combined maximum of $150,000 annually.http://beginnersinvest.about.com/cs/iras/f/tradvsrothira.htm

What is the earliest you can start taking money out of a traditional IRA?

The normal age is 59 1/2. There are some exceptions for special situations. If you withdraw money before this age there is a 10% penalty.http://askville.amazon.com/age-start-taking-money-IRA-penalty/AnswerViewer.do?requestId=4579164

What is the maximum yearly contribution to an IRA?

Regardless of the type of IRA you choose, the Federal government imposes annual contribution limits. The chart below shows the maximum dollar amount individuals are allowed to deposit into their IRA each year. After 2010, the contribution limit will raise in increments of $500 depending

upon the level of inflation. http://beginnersinvest.about.com/cs/iras/a/iracontribution.htm

What are the penalties for deducting money early for an IRA?

The taxable portion of your withdrawal is subject to a 10% early withdrawal penalty.

What Is the latest you can start taking money out of an IRA?

The latest you can start taking money out of your IRA is 70 ½ years of age.

What is the maximum yearly contribution to an IRA?

The maximum IRA is $6000.00, people 50 years or older can contribute an additional 1,000.00.

Do you have any control over the investments into an IRA?

Yes, but the rules for investing are complicated due to governmental rules regarding types of investment allowed for IRAs. Often the bank or broker does the investing for the IRA owner.http://www.journalofaccountancy.com/Issues/2000/Apr/TheDosAndDonTsOfIraInvesting.htm

Is there an age limit as to when you can open an IRA(young or old)

The IRA for minors- those under the age of 18 by their parents or guardians- the account must be set up by the person who signed the application. “Anyone who's younger than 70½ and has earned income can open an individual retirement account. While the age limit does apply to traditional IRAs, it does not apply to Roths. Even your kids can open an IRA as long as they're earning money. “http://www.kiplinger.com/basics/archives/2002/03/story28.html#ixzz1FJCgAPGg

Define contribution, tax deferred, tax deductible, non deductible, distribution

Tax deferred:Refers to a situation or an investment whereby the tax liability is delayed until a later date. Retirement plans such as 401K and IRAs are examples. Pay taxes when you take the money out – at retirement.Tax deductible:A tax deduction or a tax-deductible expense affects a taxpayer's income tax. A tax deduction represents an expense incurred by a taxpayer. They are variable amounts that you can subtract, or deduct, from your gross income.Tax Deferred: “Investment earnings such as interest, dividends or capital gains that accumulate tax free until the investor withdraws and takes possession of them. The most common types of tax-deferred investments include those in individual retirement accounts (IRAs) and deferred annuities.” http://www.investopedia.com/terms/t/taxdeferred.asp

Non-deductible: an expense that cannot be deducted for income-tax purposes.Contribution:something given to a common stock or fund; a sum of money. Money put into an IRA (for example)Distribution: Taking money out of an IRA or other account.http://www.thefreedictionary.com/contribution

Define contribution, tax deferred, tax deductible, non deductible, distribution

Non-deductible: an expense that cannot be deducted for income-tax purposes.Contribution:something given to a common stock or fund; a sum of money. Money put into an IRA (for example)Distribution: Taking money out of an IRA or other account.http://www.thefreedictionary.com/contribution

Are there any fee/fines for early withdrawal from any of the type of IRAs?

The IRS does not care from which Roth IRA you take a withdrawal. If you have multiple IRAs, they are considered as one Roth IRA for withdrawal purposes. Further, the IRS has deemed that Roth IRA distributions MUST be withdrawn in a specific order.Unless an exception applies, most distributions from a Roth IRA before the owner reaches age 59 1/2 will be subject to an "early withdrawal penalty" of 10%http://www.fool.com/money/allaboutiras/allaboutiras07.htm

How do you determine which IRA is right for you?

People often wonder what type of IRA is best. Both the Traditional and Roth IRAs have significant tax advantages, but in some situations one may be better than the other. Since we can't predict what taxes will be like 20 years from now, if you have the ability to contribute to both types of IRAs, that might be a good idea. The benefit of a Traditional IRA is that the contributions you make can be tax-deductible in the year that you make the contribution.You can think of a Roth IRA as the opposite of a Traditional IRA in terms of taxation. With a Roth IRA, your contributions are made on an after-tax basis, which means there is no current tax benefit to you when you make a contribution.http://financialplan.about.com/od/retirementplanning/f/whichIRAisBest.htm

Explain an IRA rollover.

A transfer of funds from a retirement account into a traditional IRA or a Roth IRA.

What is an educational IRA?

A savings plan for higher education, parents and guardians are allowed to make non deductible contributions to an education IRA for a child under the age of 18.

Can you contribute to an IRA if you are unemployed?

You must be employeed in order to contribute to an IRA. You must have “compensation income” which comes from a salary, tips, commisions, etc. In order to qualify to contribute to an IRA.http://www.ehow.com/info_7886938_can-contribute-ira-unemployed.html