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IRA, HSA & CESA Accounts

Individual Retirement Accounts

Millions of Americans have discovered that IRA's are one of the best savings instruments available today. More people than ever before are now eligible to take advantage of the incredible tax advantages available through IRAs.

When the Economic Growth and Tax Relief Reconciliation Act of 2001 was passed, it brought about the most sweeping changes related to retirement and other savings arrangements in recent years. Some of the more significant changes are:

  • increased contribution limits
  • catch-up contributions for individuals who attain age 50 before the end of the taxable year
  • increased portability of assets between various plan types
  • changes to rollover rules

What makes IRA's such great savings instruments is the special federal tax laws governing the taxation of amounts earned within an IRA. Earnings within Traditional IRA's are generally not taxed until they are distributed from the Traditional IRA. Earnings within ROTH IRA's and the Coverdell Education Savings Accounts, are generally not subject to any federal taxes. What's more, contributions to Traditional IRA's are tax deductible for many taxpayers. Over time, these special tax features can result in significantly larger IRA savings accumulations than what can be accomplished in ordinary savings instruments.

Traditional IRA's

Anyone who is under age 70 1/2 and has earned income can contribute to a Traditional IRA. Contributions may be tax-deductible, and taxes on earnings are deferred until you withdraw funds from the account, thus giving your investments the opportunity to compound faster. After the age of 70 1/2, account holders are required to begin to withdraw money from their account.


A convenient way to save for retirement, the Roth IRA may offer greater tax savings and withdrawal flexibility than a Traditional IRA. There are no mandatory annual distribution requirements, and you may continue contributing to your Roth IRA beyond age 70 1/2. Eligibility depends on income.

Health Savings Accounts

A Health Savings Account (HSA) is a tax-exempt trust or custodial account established exclusively for the purpose of paying or reimbursing qualified medical expenses of you, your spouse, and/or your dependents.

Coverdell Education Savings Accounts

A Coverdell Education Savings Account, formally known as an Education IRA, is an education savings plan set up and managed by a parent or guardian for the benefit of a minor. Amounts deposited in the account grow tax-free until distributed, and the child will not owe tax on any withdrawal for qualified primary, secondary and/or higher education expenses.