A quick guide to understanding individual retirement account

It did not start too early to prepare for your retirement and one of the best ways to prepare is to set up an Individual Retirement Account (often called the Irish Republican Army).
The purpose of the IRA is a tax qualified retirement savings. Anyone who works, whether as an employee or self-employed, and can customize the amount specified in the Irish Republican Army, with the proceeds of such investments tax-deferred until the date of distribution. In addition, it allows some people off all or part of their contributions to the IRA. In addition, beginning in 1998, individuals can also prepare Roth IRA are not deductible contributions, but that would not be subject to tax levies to retire.

It does not take much to create the Irish Republican Army. Trustee may (or server) is one of the banks, mutual funds, brokerage or other financial institution. You can not be your own values. IRA contributions can be made after the end of the year, at the latest specified date for submission of the tax return for that year, not including extensions. Generally means that you have until April 15 of the following year to make a contribution and a discount on your tax return.

The maximum you can contribute to the Irish Republican Army (IRA) in one year (2006) is smaller than the sum of 4000 or an amount equal to the compensation included in income for the year as well as 50 years and older are allowed to make additional contributions to $ 1,000 catch-up IRA each year to help them save more for their retirement.

The same limit applies even if you have more than one IRA, or more than one type of IRA. When you and your spouse have compensation, you can each contribute the maximum, which means total of $ 8,000 ($ 10,000 if you are 50 or more times). In 2008, the contribution limits IRA will be increased to $ 5,000, while the contribution of the catch 50 and older are $ 1,000.

You do not have to contribute the maximum allowed each year. May skip a year or even several years. You can start making contributions in any subsequent year, but you can not add additional funds to compensate those years when all contributions.

Contributions should be compensation. This may be wages, salaries, commissions and other revenue sources. They do not include such things as deferred compensation and pension payments or dividend income or interest portfolio.

You can contribute more than the limit, however, will be assessed penalty excise tax 6 percent.

There may be contributions to the IRA and inherited in the form of non-cash, during or after the year in which the person reaches the age of 70.5.

Must start taking distributions from the IRA no later than April 1 of the year following the year they reach the age of 70.5, the year in which you retire, whichever is later.

This is a quick overview and general red. The rules differ slightly from Roth IRAs, which have a contribution and limits of the distribution. Before setting up an IRA, take the time to talk with your banker, accountant or financial advisor to make sure you have a solid understanding of your options and prepare the Irish Republican Army, that meets your personal needs.