Single taxpayers with MAGI of up to $95,000 or married couples filing jointly with adjusted gross income of up to $150,000 are eligible to contribute the full $4,000 annually to a Roth IRA.  Workers who will be age 50 or older before 2007 may contribute an additional $1,000 to a Roth IRA in 2006, for a total of $5,000, so long as the contributions are made only to a Roth IRA.

The contributions amount is gradually reduced to zero for adjusted gross income levels between $95,000 and $110,000 for single taxpayers, and between $150,000 and $160,000 for married couples.

Unlike traditional IRAs, contributions to a Roth IRA can be made after age 70 ½.

Deductibility. Contributions to a Roth IRA are not tax deductible.  Instead, the tax advantage of the Roth IRA is that earnings on the contributions accumulate without tax and distributions may be received tax-free.

Distributions.  No tax due on distributions from a Roth IRA if the funds are held in the Roth IRA account for at least five years and you are at least age 59 ½ at the time of the distribution. The total amount of annual contributions to a Roth IRA can be withdrawn tax-free and penalty-free at any time.  Unlike traditional IRAs, there is no requirement that mandatory withdrawals from a Roth IRA begin at age 70 ½.