IRA Information From the Bank of Maple Plain

Starting your retirement fund now means a safer and more secure future down the road. See how an IRA account can benefit you by reading our helpful IRA guide on your right.

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Individual Retirement Accounts (IRAs)
have always been excellent retirement investments. On June 7, 2001, President Bush signed the Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA), which resulted in some sweeping changes for Traditional, Roth, and Education IRA accounts. These changes include allowing individuals to make larger annual contributions with fewer contribution restrictions, giving more ways to take advantage of the tax-free and tax-deferred savings of the IRA.

Here are a few of the major highlights of today’s IRAs…see one of our account representatives for more details about these and other investment options:

Traditional IRA

Fully/partially deductible contributions
Distributions taxed, but earnings not taxed
until distribution
Annual distributions required after age 70 1⁄2
Must have earned income/compensation
Spousal IRA available
Potential tax credit

Roth IRA

Non-deductible contributions
Tax-free distributions if qualifications are met
May contribute annually after age 70 1/2
Must have earned income/compensation
Spousal IRA available
Potential tax credit

New Contribution Limits for Traditional IRA and Roth IRA *

Tax Year	Amount	Special Contribution Limits for those age 50 and Older (“catch-up contributions”)
2002-2004 2005 2006-2007 2008-2010	$3,000.00 $4,000.00 $4,000.00 $5,000.00	$3,500.00 $4,500.00 $5,000.00 $6,000.00

*Contribution limits are decreased and phased out if your modified adjusted gross income exceeds certain limits. Professional tax advice is recommended.

Coverdell Educations Savings Accounts (formerly the Education IRA)
The name of this education savings plan is not the only thing that has changed. The annual contribution limit has been increased from $500 to $2,000 per beneficiary, and the contribution deadline has been extended. There are fewer contribution restrictions, and elementary and secondary education expenses now qualify for distributions. The CESA has become a more practical and accessible savings plan for parents, grandparents and other individuals of various income levels. Even corporations may now contribute to CESAs. It is a great way to save for education expenses, earning interest tax-free and, most importantly, no federal income taxes are paid on qualified distributions!

Call us today at 763-479-1931 with your financial needs.