IRA Basics

• Types of IRAs
• Traditional vs. Roth IRAs

• Traditional IRA — Contributions can be tax deductible and earnings have the opportunity to grow tax-deferred. Individuals with earned income can contribute up to $4,000 for the 2006 tax year. Wage earners age 50 and over can also make catch-up contributions. Learn more.
• Roth IRA — Created as an alternative to traditional IRAs, Roth contributions are not tax-deductible, although any earnings grow tax-free if certain conditions are met. This means paying taxes now to enjoy tax-free income in retirement. You must meet certain income limits to qualify. Learn more.
• Spousal IRA — Spousal IRAs are designed to help non-working spouses save for retirement by investing in a traditional or Roth IRA. Couples can contribute up to $8,000 to either type of plan for the 2006 tax year ($10,000 if they are both over age 50, as long as the total IRA contribution is less than their earned income.) Learn more about traditional and Roth IRAs.
• Rollover IRA — A Rollover IRA is a great way for someone who is changing jobs or retiring to continue to receive the same tax advantages as they had with an employer-sponsored plan like a 401(k). All assets in the plan are simply "rolled over" to an IRA, where any earnings can remain tax-deferred. Plus, an IRA generally offers more investment options and flexibility. You can also "roll over" a number of individual IRAs into one Rollover IRA, if you are interested in simplifying and consolidating accounts. Learn more.
• SEP IRA — If your employer sponsors a SEP, or Simplified Employee Pension Plan, you may be eligible for a SEP IRA. A SEP is a tax-deferred retirement plan that allows the small business employer to make tax-deductible contributions to SEP IRA accounts for their employees. This plan does not allow for employee contributions, unless the plan was established before 1997. To learn more or to open a SEP IRA, request an initial complimentary consultation with a financial advisor in your community.
• SIMPLE IRA — If your employer sponsors a Savings Incentive Match Plan for Employees, or SIMPLE IRA, you may be eligible to participate. A SIMPLE IRA is a tax-deferred retirement plan available to self-employed individuals or small businesses (those with fewer than 100 employees) that have no other retirement plan. You and your employer can make contributions; however, the plan must be established by the employer. To learn more or to open a SIMPLE IRA, request a complimentary initial consultation with a financial advisor in your community.

* Taxes may be due upon withdrawal. Withdrawals prior to age 59 1/2 may be subject to a 10% IRS penalty.

Three easy ways to open an IRA through Ameriprise Financial:

• Open an IRA online
• Open with a financial advisor
• Call toll free at (800) 257-8740

Ameriprise Financial Services, Inc., Member FINRA & SIPC.