What is the maximum amount that can be invested annually in a Roth and traditional IRA?

A. For Roth IRAs for the 2006 tax year, single taxpayers with an annual income of $95,000 or less can contribute the maximum of $4,000. Those age 50 and older can contribute up to $5,000. The maximum is reduced for single taxpayers earning between $95,000 and $150,000. It is eliminated for single filers earning more $150,000. Couples, filing together, with a combined income of up to $150,000 can contribute up to $4,000. The $4,000 is reduced for joint-filers earning more than $150,000 and up to $160,000 and eliminated for those making more than that amount. For traditional IRAs for the 2006 tax year, single taxpayers can deduct the full $4,000 if they earn $50,000 or less and couples filing together who earn a combined $75,000. Q. Can I withdraw the money early from a Roth IRA? A. Yes. If the funds have been in the account for five years or longer, you can take out the principal without paying penalties regardless of your age. To avoid paying a penalty, the taxes plus an additional ...  more