IRA Contribution and Deduction Limits

• The Internal Revenue Service (IRS) reports that, if you are 50-years-old at the end of 2009, the maximum contribution you can make to your traditional or Roth IRA is the lesser of $5,000 or the same amount as your taxable income for the year. You can split the limit between a traditional and a Roth IRA. If you are at least 50-years-old before 2010 the maximum amount that you can contribute to your IRA is the lesser of $6,000 or the same amount as your yearly taxable income. If you also participate in your employer's retirement account plans, your maximum deductions are determined by your income, marital status and whether or not you have children. For example, if your modified Adjusted Gross Income (AGI) is $55,000 or less and you are single or the head of your household, you can deduct the full amount from your IRA not to exceed your contribution limit.
  
  

IRA Rollover

• The Emergency Economic Stabilization Act of 2008 which was passed by Congress in October 2008 extended the IRA charitable rollover for two years. The Act allows Americans aged 70 ½ an older to make tax-free contributions to charities like colleges and universities totaling a yearly maximum of $100,000.
  
  

Employer Retirement Account Plans

• The United States Department of Labor reports that employers are not required to allow all of their employees to participate in a company funded retirement plan. Employers can manage separate plans for salaried and union employees. Part-time employees can open employer funded retirement accounts if they work a minimum of 1,000 hours per years or approximately 20 hours a week. It is recommended that people check with their employer to see if they are eligible to participate in their company funded retirement plans.
  
  

When Does Participation Start in Company Plans

• Typically employees must be a minimum of 21-years-old and work at the firm for at least one year before they are eligible to participate in retirement plans. It is permissible for companies to allow employees to open retirement accounts prior to their twenty-first birthday or before they have completed a full year of service. Federal law prevents employers from excluding older workers from participating in company retirement account plans simply because they are nearing retirement age.
  
  

Vesting

• Employees start to vest in retirement accounts as soon as they start contributing to the accounts. Federal law allows employers to require employees to complete a minimum of five years of service before the employee is fully vested in the account plan. Gradual vesting is also allowed. A percent is immediately 100 percent vested in individual 401k plans that are not employer funded.
  
  

Receiving Retirement Benefits

• Federal law requires people to begin receiving benefits from their retirement account by the age the age of 70 ½. They are unable to wait to receive benefits at a later time as the age is a mandatory limit. They can receive benefits from their retirement account sooner if they have 10 years of service with your employer, are terminating their employment or are nearing 65 years of age. Typically it takes up to 60 days after a person requests a withdrawal before the first payment is received.
  
  

Termination of Plan

• In the event that the employer retirement account plan is terminated, federal laws requires that active employees currently participating in defined benefit or defined contribution account plans become 100 percent vested in their accrued benefits. This protects employees and allows them to receive the full amount of monies in their retirement accounts at the time that the plan is terminated.