When you begin to talk about retirement you should consider how IRA's can assist you with your retirement planning. With Ira's you have two types the Traditional and the Roth Ira. Both can help you meet your retirement goals and there are certain things that are specific to each type.

First lets examine the Traditional Ira. These types are geared towards those individual that are in their peak earning years, it's when your income is the highest. This is in regards to the time when your income is going to be the highest during the life cycle. Now with the traditional Ira your investment earnings will accumulate tax-free until you are ready to withdraw the funds. This practice is also known as tax-deferred. What's so advantageous about the Traditional Ira is you earn interest while gaining tax advantages during the years when your income is the highest. You are also able to withdrawn the money after age 59 without penalty and this of course is during the time when your income is lower therefore you are in a lower tax bracket, so even though you have to pay taxes it won't be as much become, as stated you are in a lower tax bracket.

Contributions may be tax deductible. I would like to repeat that contributions may be tax deductible. To be on the safe side it is a good idea to check with a tax advisor to see how this is going to work with you own particular situation.

It could also put money back into your pocket by lowering your taxable income, and it will depend on your income, how you file your taxes, and whether or not you participate in a employer sponsored plan. Again as mentioned before please check with your tax advisor. Also the amount of contributions per individual increase per year, which in effect allows you to increase the dollar amount you set aside for retirement each year.

What are the requirements for participation?
You must be under the age of 70 for that entire year and you must have earned income to be eligible to make contributions. For the tax year 2007 if you are age 50 or below the maximum amount of your contributions are 100% of your earned income however your contributions cannot exceed $4,000. And for individuals between 50 and 70 you can contribute 100% of your earned income however contributions cannot exceed $5,000.

Any time during the contribution period if you are eligible you may contribute the maximum annual amount. There is a cut off for the contributions. You can make contributions

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