Retirement Accounts and Coverdell ESA's
The information contained on this page is for your reference only. As in all tax-sensitive matters, please consult a Certified Public Accountant before investing.
An Individual Retirement Account (IRA) is an excellent tool for retirement savings. Unlike most investments, depending on the type of IRA you choose, contributions may be tax deductible and will grow either tax-deferred or tax-free.
A Coverdell Education Savings Account (ESA), formerly Education IRA, is a great way for parents, grandparents and others to help meet the rising costs of a student's education.
Traditional IRAs, Roth IRAs and Coverdell Education Savings Accounts must be opened and/or funded by the April 15th tax filing deadline to receive your tax deductions. A filing extension won't buy you extra time.
As of January 1, 2013 the annual contribution limit is $5,500. The annual limit applies collectively to both Roth and Tradional IRA's.
Contributions are fully tax deductible if you are NOT an active participant in an employer retirement plan or your income does not exceed certain limitations. Investments grow on a tax deferred basis. Distributions must begin at age 70½. Contributions and earnings are taxed only upon withdrawal.