Roth IRA
- Tax-free withdrawals for distributions after 5-year holding period
- Qualified Certificates of Deposit, Assured Savings and High Yield options
Contribution eligibility requirements:
- Must have earned income, or spouse has earned income in past calendar year
- Modified adjusted gross income (MAGI) cannot exceed certain limits
Contribution limits under age 50:
- For 2007 tax year, any amount up to 100% of compensation of $4,000, whichever is less (as long as the MAGI is within prescribed limits)
- For 2008 tax year, any amount up to 100% of compensation or $5,000, whichever is less (as long as the MAGI is within prescribed limits)
Contribution limits age 50 or older:
- For 2007 tax year, any amount up to 100% of compensation or $5,000, whichever is less (as long as the MAGI is within prescribed limits)
- For 2008 tax year, and amount up to 100% of compensation or $6,000, whichever is less (as long as the MAGI is within prescribed limits)
Remember:
- $4,000 is the aggregate amount that may be contributed to any Roth and/or Traditional IRA for the 2007 tax year
- $5,000 is the aggregate amount that may be contributed to any Roth and/or Traditional IRA for the 2008 tax year
- You may use funds from your other Principal Bank accounts to invest in either Roth or Traditional IRA
See the IRA custodial agreements (PDF: 229 KB) for additional plan information.
