I am trying to determine what contributions could be made to a Roth IRA. I think I have the contributions worked out except the provision on deducting contributions to traditional IRAs. The bit I have not worked out is if any of my employers compensation plan would fall under the category of traditional IRA. It consists of 3 components:

401(k) - partial empoyer match
Profit Sharing Account - payed into by employer
Defined Benift Plan - augments distributions from Profit sharing account if distributions do not meet a minimum ammount

I am 75% certain that these do not apply, but I probably should properly understand what qualifies as a traditional IRA anyway.

Thank you for any information you can provide.

Regards,

Joe M.

Your employers retirement schemes do not constitute an IRA. IRA is individual retirement account, set up by person for their sole benefit. IRS pub 590 explains IRAs.

IRAs are separate from your company plans.

Within IRAs there are two main catagories: regular and Roth. Roth IRAs offer no tax deduction, but normally all funds in retirement can be distributed tax free. Roths also do not have any fixed or required distribution schedule, and you can withdraw contributions at any time for an emergency. Regular IRAs may either be deductable or not, depending upon your circumstances.

The current maximum annual contribution is $4,000, boosted to $4,500 if you are over age 50. This maximum applies to the combined contributions to all Roths and IRAs in that year. Earned income, tax filing status and and total adjusted income are factors in determining your eligibility. See details in IRS Publication 590 or post again.

Thank you Janet. Just what I needed.

Mr.JoeM

Here is some additional data from IRS

http://www.irs.gov/retirement/participant/index.html