Roth IRA's

You may be able to invest up to $3,000 in a Roth IRA or $3,500 if you are 50 years old or older in 2002. This contribution is NOT deductible.

A Roth IRA is an account or annuity set up in the United States solely for the benefit of you or your beneficiaries. It is an individual retirement plan. However, it differs from traditional IRAs in that contributions are not deductible. You may contribute to a Roth IRA if you have taxable compensation and your modified adjusted gross income is less than $110,000 ($160,000 if you are married and file a joint return, and $10,000 if you are married, lived with your spouse and file a separate return). The amount you may contribute to a Roth IRA is gradually reduced if your modified adjusted gross income is between $95,000 and $110,000 (between $150,000 and $160,000 if you are married and file a joint return, and between $0 and $10,000 if you are married, lived with your spouse and file a separate return). The amount you may contribute to a Roth IRA is reduced by contributions you make to a traditional IRA. The amount you may contribute to a Roth IRA also may not exceed your taxable compensation. You may continue to make contributions to your Roth IRA after reaching age 70 1/2.

Distributions made more than 4 years after the end of the first year a contribution was made to a Roth IRA set up for your benefit, are not taxable if made either:

• after you are 59 1/2,
• because you are disabled,
• to a beneficiary or your estate after your death, or
• to buy, build or rebuild a first home.

Distributions that are a return of your regular contributions are tax–free.

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