<font face="Verdana, Arial, Helvetica, sans-serif" size="2">Originally posted by LIH Prem:
Though it was terse, he was suggesting that a Roth may be a better option. There's no upfront tax advantage like there might be with a traditional IRA, but there's a lot more advantage down the road. One reason somebody may not be able to open a Roth is because they have too much income. I don't know what the cutoff for Roth eligiblity is for tax year 2003, but it used to be $160k.
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For Married Filing Joint filing status, eligibility to contribute to a Roth IRA still phases out between $150K and $160K MAGI. For Single, the phaseout is between $95K and $110K.
Also, it is FALSE that there is no upfront tax advantage for a Roth. If your income is sufficiently low (up to $25K single, or $50K MFJ), you can get a tax break commonly known as the "Saver's Credit." This has been available since tax year 2002. (The same saver's credit can also be had for contributions to a Traditional IRA and to a 401K/403b, etc. It's a bonus benefit, in addition to any tax savings due to the reduction of taxable income.)
Furthermore, you can put money into BOTH a Traditional AND a Roth, as long as the total doesn't exceed the allowable IRA contribution for your circumstances (usually $3,000; but $3,500 for those aged 50 and over by the end of the tax year).
Consult
www.irs.gov or other authoritative tax sources for details.
I believe it is indeed true that by law, you CANNOT get any miles or other special bonuses for opening IRA accounts.
And if you're looking for high CD rates at banks, consult
www.bankrate.com . Many of the banks paying high interest rates do offer IRA accounts.
Kathy