Individual Retirement Accounts (IRA)

Eligibility

• Eligible to anyone with an annual income less than the limit. See IRS.gov for each year’s income limit.
• There are no age restrictions.

Contribution Rules

• Maximum of $6,000 per year per person if you are under 50 years old, maximum of $7,000 per year per person if you are over 50 years old.
• No age limit for contributions, in some states. 

Tax Benefits

• Contributions are not tax deductible.
• Earnings are tax-free, no taxes are due upon withdrawal.

Withdrawals & Distributions

• Penalty-free withdrawals after 59 ½ years old.
• No Required Minimum Distribution (RMD) for a Roth IRA.
• Withdrawals are not subject to tax (income tax does not apply, estate or other taxes may apply.)
• 10% Early Withdrawal Penalty due unless withdrawn for a qualified reason (See IRS.gov to get updated info on qualified withdrawals.) 

Eligibility

• When the account is established, the designated beneficiary must be under the age of 18.

Contribution Rules

• Any individual whose modified adjusted gross income is under the limit set for a given tax year can make contributions. (See IRS.gov for income limits)
• Maximum of $2,000 per year per beneficiary until. Exceptions for children with special needs.

Tax Benefits

• Contributions are not tax deductible.
• Earnings are free from federal income tax if used for qualified expenses before the beneficiary turns age 30. Exceptions for children with special needs.

Withdrawals & Distributions

• Distributions are tax-free to the extent the amount of the distribution doesn’t exceed the beneficiary’s qualified education expenses.
• Amounts remaining in the account must be distributed when the designated beneficiary reached age 30, unless the beneficiary is a special needs beneficiary.