Thanks for the link vi_edit, that'll be going into my bookmarks.
Here's some info I saw towards the end of the Quicken.com IRA calculator:
Now that you've seen what IRA account options will do for you, it may be a good idea to review your overall retirement strategy.
Are you saving enough money to meet your retirement goals? Consider using an online retirement planning tool. Many tools will give you an idea of:
Your projected income from Social Security
Your projected pension plan income
How much more you'll need to save to meet your goals
Which tax-deferred savings options you should investigate
Seeking more information about IRAs? The increases in the maximum contribution amounts for 2002 forward provide even greater savings opportunities. Recent changes in tax laws have affected all IRA accounts, including:
traditional IRAs
Roth IRAs
SEP-IRAs
SIMPLE IRAs
Rollovers from one plan to another or to IRAs
The Basics About Traditional IRA Accounts
Here's a brief, to-the-point synopsis of how IRAs work. An individual retirement account (IRA) is a personal savings plan that offers you tax incentives to set aside money for your retirement. Social Security benefits alone often cannot cover the retirement needs of many Americans.
One advantage of an IRA is that you have control over how your assets are invested. You decide (with certain limitations) how to invest your IRA assets, how much to invest (again, with certain limitations), how often you make contributions, and how much risk you want to take with the assets.
A traditional IRA is any IRA that is not a Roth IRA, a SIMPLE IRA, or an Education Savings Account (which used to be called Education IRAs). Using this definition, a SEP IRA is also a traditional IRA, but special rules apply to them.
A traditional IRA is sometimes called an ordinary, regular, or original IRA.
Contributions to your IRA
Ordinarily, you establish an IRA by making a deposit with an IRS-approved custodian (such as a bank, mutual fund, or stockbroker). There's no limit to the number of IRA accounts you can have.
In general, you are allowed to contribute $3,000 in 2002, plus another $500 if you're at least 50 years old, to an IRA as long as you have at least that much in earned income - in other words, if you earned $1,500 this year, you can only contribute $1,500.
You may be able to deduct your contribution in whole or in part depending on your income, filing status, and whether you're covered by another retirement plan. The actual amount you can deduct is calculated on various IRA worksheets that are provided with the instructions to Form 1040 and Form 1040A.
You're allowed to leave the money you can't deduct in your IRA. For example, if you contribute $2,000 and can only deduct $500, you can leave the other $1,500 in the IRA as what's called a "nondeductible contribution." This $1,500 becomes your tax basis in your IRA accounts, which means that you won't be taxed on this money when you later withdraw it.
You can create and make a contribution to your IRA for 2002 any time from January 1, 2002, up to the filing deadline on April 15, 2003.
You can't get an extension for IRA contributions even if you request an extension of time to file the tax return.
NOTE: This doesn't work like your tax return, where the postmark determines when you filed your return. Your IRA has to be in place and funded before you file your return or by April 15, 2003, whichever date is earlier.
Distributions from your IRA
The earnings, such as interest, on IRA accounts are not taxed until they're distributed. (However, this is not considered to be tax-exempt interest, so be sure you don't report it as such on your tax return.)
To avoid penalties, you generally can't begin taking distributions from your traditional IRA until age 59-1/2. There are some exceptions to this rule; they're listed-and calculated-on IRS Form 5329 (Additional Tax on IRAs).
When you do start taking distributions in retirement (after age 59-1/2), there are two possibilities on how the distributions will be taxed:
If you've always been able to deduct all of your IRA contributions, the distributions are fully taxable (this is because you haven't been taxed on the contributions or the earnings to that point, so it will be taxed when you start receiving it).
If you've made any "nondeductible contributions" to your IRA at any time, the taxable amount is calculated on Form 8606 (Nondeductible IRA Contributions). The taxable amount is a percentage of the amount you withdraw.
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