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This is the simplest way to get started with a tax-deferred product. Depending on how much you earn, you may be able to reduce your tax bill by deducting some or all of your contribution from your Modified Adjusted Gross Income (MAGI). More highlights include:
- Lets you contribute up to $4,000 per year and enjoy tax-deferred growth
until withdrawn*
- Your earnings are tax-deferred
- Retirement distributions are taxed at your ordinary income tax rate
- Minimum distributions are required at age 70-1/2
Use this table to find out if you qualify:
| Filing Status |
MAGI** Limits for
1999 |
New MAGI**
Limits |
| Single |
$33,000 |
$50,000 by 2005 |
| Married/Joint |
$53,000 |
$80,000 by 2007 |
Also, if you're married and do not personally participate in an employee-sponsored retirement plan, you can take a full deduction as long as your combined annual income does not exceed $150,000.
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