If you don’t have an employer-sponsored retirement plan or if you’d like to save additional funds on a tax-deferred basis, you should consider a Traditional IRA through Modern Woodmen (you qualify if you are under the age of 70½ and have self employment or W-2 reportable income). A Traditional IRA may allow tax-deductible contributions. 

This plan allows you to defer taxes on your savings until retirement, at which time withdrawals may be taxed at a lower rate.  If you expect to be in a lower tax bracket when you retire, a Traditional IRA may be particularly advantageous for you.

If you believe you will be in the same or higher tax bracket when you retire or you would like to reduce your income taxes during retirement, you may benefit more from a Roth IRA.  

Advantages

Tax-deductible contributions
You may be eligible to deduct Traditional IRA contributions from your income.  Your eligibility to deduct contributions depends on your participation in an employer-sponsored retirement plan, tax filing status and modified adjusted gross income.

Tax-deferred growth
Whether or not you are eligible to deduct your contributions, you can still contribute to a Traditional IRA and take full advantage of compounded, tax-deferred growth.
 
No annual fees
Modern Woodmen does not charge an annual fee for Traditional IRA administration.

Details 

Participation
If you or your spouse has self-employment or W-2 income for the tax year in which you would like to make a contribution and you will not reach the age of 70½ during that tax year, you are eligible to contribute to a Traditional IRA.  

Contributions
For individuals who will be under age 50 as of the end of the calendar year, the maximum contribution you can make per year is the lesser of your earned income or:

        $5,000 for tax years 2009 and 2010

For individuals who attain the age of 50 or older as of the end of the calendar year, the maximum contribution you can make per year is the lesser of your earned income or:

        $6,000 for tax years 2009 and 2010

The deadline for making a contribution for the previous tax-year is your tax-filing deadline (usually April 15th) and does not include any extensions.

Deductible contributions for individuals not participating in an employer-sponsored retirement plan:

If your tax-filing status is single, you are eligible for a full deduction.  

If your tax-filing status is married and neither you nor your spouse is participating in an employer-sponsored plan, both of you are eligible for a full deduction.  

Deductible contributions for participants in an employer-sponsored retirement plan:

     Tax-year 2010 Modified Adjusted Gross Income limits

                    If your tax-filing status is single or head of household:

Modified Adjusted Gross Income	Tax Deduction Qualified For
$56,000 or less	Full deduction
Between $56,000 and $66,000	Partial deduction
$66,000 or more	No deduction

If your tax-filing status is married filing jointly or qualifying widow(er):

Modified Adjusted Gross Income	Tax Deduction Qualified For
$89,000 or less	Full deduction
Between $89,000 and $109,000	Partial deduction
$109,000 or more	No deduction

If your tax-filing status is married filing separately:

Modified Adjusted Gross Income	Tax Deduction Qualified For
Less than $10,000	Partial deduction
$10,000 or more	No deduction

If your tax-filing status is married filing jointly, and one spouse is participating in an employer-sponsored retirement plan while the other spouse is not a participant in an employer-sponsored retirement plan, the spouse that is not a participant can take a tax-deduction based on the following limits:

Modified Adjusted Gross Income	Tax Deduction Qualified For
$55,000 or less	Full deduction
Between $55,000 and $65,000	Partial deduction
$65,000 or more	No deduction

          If your tax-filing status is married filing jointly or qualifying widow(er):

Modified Adjusted Gross Income	Tax Deduction Qualified For
$89,000 or less	Full deduction
Between $89,000 and $109,000	Partial deduction
$109,000 or more	No deduction

If your tax-filing status is married filing separately:

Modified Adjusted Gross Income	Tax Deduction Qualified For
Less than $10,000	Partial deduction
$10,000 or more	No deduction

If your tax-filing status is married filing jointly, and one spouse is participating in an employer-sponsored retirement plan while the other spouse is not a participant in an employer-sponsored retirement plan, the spouse that is not a participant can take a tax-deduction based on the following limits:

Modified Adjusted Gross Income	Tax Deduction Qualified For
Less than $166,000	Full deduction
Between $166,00 and $176,000	Partial deduction
$176,000 or more	No deduction

Withdrawals
Withdrawals are taxed as ordinary income, but there may be an additional 10 percent penalty imposed by the IRS if you make withdrawals before you reach the age of 59½.  

Exceptions to the 10 percent penalty are as follows: attain the age of 59 ½, qualified educational expenses, first-time homebuyer ($10,000 lifetime limit), death, disability, substantially equal periodic payments, qualifying unreimbursed medical expenses exceeding 7.5 percent of AGI, and qualifying medical insurance premiums if you are unemployed during the year .  

Transfer existing Traditional IRAs to Modern Woodmen
If you have an existing Traditional IRA that you’d like to move to Modern Woodmen of America, you can avoid additional income taxes by completing a Traditional IRA to Traditional IRA transfer.