Withdrawals Taxed as ordinary income. No age limit. No required distributions prior to death. Yes, penalty exceptions apply, including first-time home purchase and higher education. Yes, penalty exceptions apply, including first-time home purchase and higher education.
Participation is based on income levels.
Highlights Phase out limits that govern eligibility to make deductible contributions by those in an employer plan increase each year until the year 2005 for single individuals and the year 2007 for married couples. Spouse of retirement plan participant is not automatically considered an active participant. Highlights Contributions are not tax-deductible. Provides for tax and I.R.S. penalty-free earnings, if certain conditions are met. No required minimum distributions prior to death.