You can open a traditional IRA as long as you have earned and are under age 70 1/2. Contributions are tax deductible and you may contribute up to $5000 per year (as of 2008). Earnings are not taxed as long as they remain within the account. After age 59 1/2, withdrawals are subject to regular taxes. Early withdrawal is subject to taxes and a 10 percent penalty unless it qualifies as an exception under IRS rules (for large medical expenses, purchase of a first home or certain educational expenses) or in the event you are disabled or have inherited the IRA.
You may contribute $5000 per year (as of 2008) to a Roth IRA, but cannot deduct the from your taxes. Anyone with earned income can open a Roth IRA with no age restriction. After 5 years or age 59 1/2, whichever comes first, you may withdraw earnings without penalty and they are not subject to . Contributions can be withdrawn at any time. The exceptions that allow early withdrawal are similar to the traditional IRA, except that withdrawals for buying or repairing a first home are limited to a total of $10,000.
The legislation would provide manufacturers with the option of establishing a manufacturing reinvestment account (MRA), similar to an individual retirement account (IRA), at a local community bank, and to make annual pre-tax contributions into these accounts of up to $500,000 over a period of seven years.
-Hugh F. McCann Jr.