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Individual Retirement Accounts
Choose the Account That Fits Your Financial Future

Traditional IRA
Roth IRA
Education IRA
Benefits
    Save for your retirement with tax-deferred earnings. Your contributions may also be tax deductible (with certain limitations).
    Save for your retirement with earnings that are tax-deferred and withdrawals that may be tax-free (see below).
    Save for your children's education with earnings that are tax-deferred and withdrawals that may be tax-free (see below).
Withdrawals
  • Taxable except for any pretax contribution.
  • Allowed without penalty after age 59½.
  • Other exceptions may apply, such as death, disability, home purchase, education, medical expenses, etc. (withdraw up to $10,000 in your lifetime for your first home).
  • Contribution amounts can always be withdrawn tax and penalty free.
  • Earnings may be withdrawn without tax or penalty after account is open for five years and after age 59½.
  • Other exceptions may apply, such as death, disability, home purchase, education, medical expenses, etc. (withdraw up to $10,000 in your lifetime for your first home).
    Tax- and penalty-free as long as withdrawals are used for qualified education expenses.
Eligibility
    You must be younger than age 70 ½ for the years in which you contribute.
    Allowed regardless of participation in an employer's retirement program.
    Parents, grandparents, or any interested party may contribute up to the annual limit for a child.
Spousal Eligibility
    May be opened for spouse if spouse doesn't earn income.
    May be opened for spouse if spouse doesn't earn income.
    Not applicable.
Annual Contribution Limits
  • For tax year 2004 - Either $3,000 or 100% of earned income (whichever is less), minus any contribution you make to a Roth IRA.
  • For tax year 2005 - Either $4,000 or 100% of earned income (whichever is less), minus any contribution you make to a Roth IRA.
  • If your spouse doesn't earn income, you can contribute to a spousal IRA.
  • If you're at least 50 years old, you may contribute an additional $500.
 Same as Traditional, plus:
  • Contributions allowed up to the annual limit as long as your modified annual gross income (AGI) falls within income limits ($110,000 or less if you're single, $160,000 if married and filing jointly).1
  • If modified AGI exceeds eligibility limits, contribution limits phase out.
  • Up to $2000 annually until the child turns 18.
  • Up to the annual limit as long as your modified annual gross income (AGI) falls within income limits ($110,000 or less if you're single, $220,000 if married and filing jointly).
Distribution Requirements
    Must begin to take distributions by April 1st of the year after you become 70½ years old.
    No required distributions while you're alive, but your beneficiaries will be subject to distribution rules after you die.
    Unused amounts must either be used or rolled over to another family member under 30 years of age. Otherwise, remaining amount is subject to a 10% federal tax penalty.
Tax Deductions for Contributions
    Fully deductible regardless of AGI3 if you and your spouse aren't in an Employer Retirement Plan (ERP).2
    Contributions are made after tax
    Contributions are made after tax
  1. Based on an IRS formula, the allowed contribution is reduced (phased out) when AGI exceeds these limits.
  2. If you are in an ERP program, the allowed deduction is reduced when AGI exceeds certain limits set by IRS.
  3. AGI is an abbreviation for "Adjusted Gross Income."

Other IRA Options
American Savings Bank also offers other employer-sponsored retirement account options in which you may be able to participate if your employer has already set them up. These options include SEP IRAs and SIMPLE IRAs.



† American Savings Bank