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Retirement Planning

Education Savings Account            Contribution Limits
Traditional IRA Deduction             Catchup Contriubutions

Education Savings Account
The contribution phase-out range for ESA joint filers is $190,000 to $220,000 and single filers $95,000 to $110,000.

Traditional IRA Deduction
This chart summarizes whether you can take a full deduction, a partial deduction, or no deduction from your Traditional IRA contribution.
Effect of Modified AGI11 on Deduction if Covered by Retirement Plan at Work In 2003, if you are covered by a retirement plan at work, use this table to determine if your modified AGI affects the deduction you can take for contributions made to your Traditional IRA. For subsequent tax years, see additional information below.

1 Modified AGI (adjusted gross income).
2 If you did not live with your spouse at any time during the year, your filing status is considered Single for this purpose (therefore, your IRA deduction is determined under the "Single" column). The thresholds for all filing statuses, except married filing separately, are scheduled to increase each year through 2005 for single filers and through 2007 for joint filers. The amounts reflected above are for tax year 2003.

Effect of Modified AGI1 on Deduction if NOT Covered by Retirement Plan at Work If you are not covered by a retirement plan at work, use this table to determine if your modified AGI affects the deduction you can take for contributions made to your Traditional IRA.

3 You are entitled to the full deduction if you did not live with your spouse at any time during the year.

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Contribution Limits

SIMPLE
(Pre-tax deferral maximum)

$6500
$7000
$8000
$9000
$10,000
$10,000

*The maximum regular contribution amount can be adjusted for inflation in 2009 & 2010.
**This includes Traditional IRA contributions made by an employee into their own SEP IRA account.

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Catchup ContributionsThe Tax Relief Reconciliation Act of 2001 allows individuals age 50 or older to make additional contributions called “catchup contributions.” Catchup contributions can be made into IRAs or 401(k), 403(b), SAR-SEP, SIMPLE or 457 plans.

*Can be to either a deductible or Roth IRA

This information may answer some of your questions, but it is not intended as a comprehensive analysis of this complex topic. First Clearing, LLC periodically provides information to clients. No one should infer that because of this service First Clearing, LLC assumes any fiduciary duties. In addition, such services should not be relied upon as your only source of information. Competent tax and legal advice should always be obtained.

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