Accounts/Coverdell Education Savings Accounts
What Is An IRA?
An Individual Retirement Account (IRA) is a special savings
plan authorized by the Federal government to help individuals accumulate
funds for retirement.
Traditional IRAs – Under this arrangement,
contributions may be partially or fully deductible, but
distributions are generally taxable.
Roth IRAs – With Roth IRAs, contributions are not
deductible, but distributions can generally be withdrawn tax-free.
Who Can Contribute?
Anyone who has earned income or received alimony and falls
within the modified adjusted gross income limits may
contribute to an IRA. Income from other sources, such a investments or
inheritances, does not qualify. You cannot make regular contributions to
a traditional IRA if you are age 70½ or older. However, you can still
contribute to a Roth IRA and make rollover contributions to a Roth or
traditional IRA regardless of your age.
How Much Can I Contribute?
For 2012, the maximum you can contribute to all of
your traditional and Roth IRAs is the lesser of $5,000 ($6,000 if you
are age 50 or older) or your taxable compensation for the year.
For 2013, the maximum you can contribute to all of your
traditional and Roth IRAs is the lesser of $5,500 ($6,500 if you are age 50
or older) or your taxable compensation for the year.
What is a Coverdell Education Savings Account?
A Coverdell Education Savings Account (ESA) is
an account created as an incentive to help parents and students save for
The total contributions for the beneficiary
cannot be more than $2,000 in any year, no matter how many accounts have
been established. A beneficiary is someone who is under age 18 or is a
special needs beneficiary.
Contributions to a Coverdell ESA are not
deductible, but earnings grow tax free until distributed. Distributions are
tax-free as long as they are used for qualified education expenses, such as
tuition and fees, required books, supplies and equipment and qualified
expenses for room and board.
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Individual Retirement Accounts
Health Savings Accounts
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Funds Availability Policy