IRA Certificates
Interest rates as of November 21, 2008 - Minimum balance: $500.00

	Annual Percentage Yield	Interest Rate
3 Months	2.35%	2.33%
6 Months	3.03%	3.00%
8 Months	3.09%	3.05%
***Special*** 12 Months	3.85%	3.80%
18 Months	3.55%	3.50%
22 Months	3.24%	3.20%
24 Months	3.60%	3.55%
36 Months	3.91%	3.85%
48 Months	3.96%	3.90%
***Special*** 60 Months	4.37%	4.30%
PENALTIES:	3-6 Month Certificate: 1-3 Years Certificate: Over 3 Year Certificate:	3 Months Interest  6 Months Interest 12 Months Interest

* Deposits can be made to any account at any time.

Liberty Variable IRA Certificate
Interest rates as of November 1, 2008 - Minimum balance: $25.00

Certificates	Annual Percentage Yield	Interest Rate
$25.00 - $4,999.99	.65%	.65%
$5,000.00 - $99,999.99	.90%	.90%
$100,000.00 +	1.01%	1.00%

IRA Savings Passbook
Interest rates as June 1, 2006 - Minimum balance: $25.00

Certificates	Annual Percentage Yield	Interest Rate
IRA Savings Passbook	1.26%	1.25%

What is an IRA?

Tax-deferred, trusted deposit account into which certain eligible individuals contribute funds for retirement up to annual contribution limits.

Advantages of an IRA • Types of Contributions • Who can contribute? • Compensation • Penalties

ROTH IRA

What is a Roth IRA?

The Roth IRA is a nondeductible account that features tax-free withdrawals for Certain distribution reasons after a five-year holding period.

Eligibility • Qualified and Nonqualified Distributions • Contributions

Advantages of an IRA:

1. Immediate income tax benefits. Contributions too many types of IRAs can be either fully or partially deducted for income tax purposes.
2. Earnings on contributions have tax advantages. Depending on the type of IRA, earnings are usually tax deferred or tax free.
3. Provides a means to supplement other retirement income.
4. Receive income when older usually tax liability is less.

Who can contribute?

1. No minimum age requirement.
2. An IRA owner must have earned income (compensation).
3. Maximum - may not establish to contributory IRA for or after the tax year in which they turn 70 1/2.

Compensation:

1. Includes wages, salaries, tips, professional fees, bonuses, and other amounts received for personal services rendered.
2. Taxable alimony and separate maintenance payments are considered compensation when determining IRA contribution eligibility.
3. Compensation also includes self-employment income. Self-employed individuals must aggregate all sources of self-employment to determine net profit or loss.

Types of Contributions/Eligibility:

Contributory	$5,000 or 100% of compensation whichever is less.
Spousal	Must be married at the end of the year. Must file a joint federal income tax return. Effective February 1, 1997 both can have compensation. Compensation to be added together to determine the total contribution amount. Receiving spouse's compensation must be less than contributory spouse. Contribution limit is 100% of combined earned income or $5,000.
Rollovers	Occurs when the IRA owner requests a distribution from an IRA, and then rolls the assets back into an existing IRA, a new IRA or back to the original IRA. The customer has 60 calendar days beginning the day after the funds are received to complete the rollover contribution. The IRA owner is allowed one rollover per 12-month period. The 12 month period begins the day the IRA owner originally withdraws the assets from the IRA.
Transfers	IRA assets are moved directly from one financial organization to another without the IRA owner having control of the assets. Unlimited number of transfers allowed.

Penalties:

1. If participants take distributions before age 59 1/2 (except for specified allowed exceptions), they must pay a 10% tax penalty.
2. 6% excess contribution penalty.
3. If an IRA owner fails to take a required minimum distribution, a 50% excess-accumulation tax is imposed on the amount not withdrawn. Form 5329 completed by IRA owner.
4. IRS requires taxpayer to keep track of nondeductible contributions vs. deductible contributions through use of Form 8606. Form 8606 must be filed each year taxpayer makes a nondeductible contribution to an IRA and for each year the taxpayer takes a distribution from an IRA which he/she made a nondeductible contribution. Taxpayer owes a $50 penalty for failure to properly file Form 8606. Additionally, overstate the amount of nondeductible contribution that could result in a $100 penalty per overstatement.
5. Qualified Plan Rollovers - Indirect - If an employee takes possession of an eligible rollover distribution (ERD) the employer/plan administer must withhold 20% federal income tax.
6. Technical Corrections Bill - On top of the usual 10% premature-distribution penalty, the technical corrections bill proposes an additional 10% penalty for those converting in 2008 who fail to hold the assets in a Roth IRA for five years. The additional 10% penalty does not apply to conversions occurring in years after 1998.

Eligibility of Roth IRAs

1. Individuals must have earned income (or their spouse must have earned income)
2. Their modified adjust gross income (MAGI) cannot exceed certain limits.

Contributions

1. The amount that individuals are eligible to contribute to a Roth IRA is dictated by the amount of their earned income and their MAGI.
2. Individuals can contribute up to the lesser of $5,000.00 or 100% of their compensation subject to MAGI limits.
3. See attached for limits.
4. Spousal contribution limit is 100% of combined earned income or $5,000.00; whichever is less - subject to MAGI limits. This amount must be split between the spouses' IRAs. The maximum contribution to either IRA is $5,000.00.
5. Individuals age 70 1/2 or older are eligible to contribute to a Roth IRA.
6. Contribution deadline for a Roth IRA is the same as a traditional IRA.

Qualified and Nonqualified Distributions

1. Individuals who receive distributions within a five-year holding period or take nonqualified distributions must pay taxes on the earnings withdrawn. In addition, the IRAs 10 percent premature-distribution penalty may apply to the earnings depending on the distribution reason.
2. Qualified distributions include: (earnings withdrawn are penalty free and tax free)
1. distributions made on or after the date on which the individual attains 59 1/2
2. distributions made to a beneficiary upon the individual's death
3. distributions attributable to being disabled
4. qualified first-time homebuyer distributions
3. Nonqualified Distributions are distributions taken within five years and/or taken for reasons other than the qualified reasons given. May or may not be subject to tax or penalties.
1. Original contribution amounts are returned first
2. Individuals can always withdraw their principal tax-free and penalty free for any reason at any time.
3. When nonqualified distributions exceed the original contribution amounts, taxes and a 10% premature-distribution penalty may apply to the earnings withdrawn.
4. The following are types of Roth IRA distributions are subject to taxes on earnings withdrawn; however, the 10% premature-distribution penalty does not apply:
1. Substantially equal periodic payments.
2. Eligible medical expenses in excess of 7.5% of MAGI.
3. Medical insurance premiums for eligible unemployed individuals.
4. Qualified education expense distributions.
5. Distributions taken within the first five years for any of the following reasons: age 59 1/2, death, disability, or first-time home purchase.

New IRA Legislation Comparison Chart

	Traditional IRA	Roth IRA	Educational IRA
Eligibility	Under age 70 1/2 Earned Income	Earned Income MAGI Limits (defined below)	Designated beneficiary under age 18 No state prepaid tuition program MAGI Limits (defined below)
Contribution Limits	Lesser of 100% of earned income or $5,000 Aggregated with Roth IRA contribution	Lesser of 100% earned income or $5,000 ---subject to MAGI limits Aggregated with traditional IRA contribution	$2,000 --subject to MAGI limits
Deductible Contributions	Yes --subject to MAGI limits	No	No
Single filers MAGI limits for 2008	$53,000 or less=full deduction Between $53,000 and $63,000=partial deduction $63,000 or more=no deduction	$101,000 or less=full contribution Between $101,000 and $116,000=partial contribution $116,000 or more=no contribution	$101,000 or less=full contribution Between $101,000 and $116,000=partial contribution $116,000 or more=no contribution
Joint Filers MAGI Limits for 2008	$85,000 or less=full deduction Between $85,000 and $105,000=partial deduction $105,000 or more=no deduction	$159,000 or less=full contribution Between $159,000 and $169,000=partial contribution $169,000 or more=no contribution	$159,000 or less=full contribution Between $159,000 and $169,000=partial contribution $169,000 or more=no contribution
	Traditional IRA	Roth IRA	Educational IRA
Tax-Deferred Earnings	Yes	Yes	Yes
Tax-free Qualified Distributions	None	Age 59 1/2 death disability first-time home buyers Note: must meet 5-year holding period	Qualified higher education expenses
Distributions that are taxable but no 10 percent penalty	Age 59 1/2 Death Disability Substantially equal periodic payments Qualified medical expenses (exceeding 7.5% of AGI) Qualified medical insurance premiums by certain unemployed individuals Higher education First-time home buyers	Substantially equal periodic payments Eligible medical expenses (exceeding 7.5% AGI) Eligible medical insurance premiums by certain unemployed individuals When taken within the first five years: age 59 1/2; disability; death; and first-time home buyers distributions	Death; disability; and scholarship
Taxations Issues for Withdrawals	Earnings and deductible Nondeductible contributions are not taxed Withdrawals are a ratio of deductible and nondeductible amounts	Earnings withdrawn for nonqualified reasons are taxable Contributions are not taxed when withdrawn Withdrawals are considered to be the return of contributions first, then earnings	Earnings withdrawn for nonqualified reasons are taxable Withdrawals are a ratio of taxable (earnings) and nontaxable (contributions) amounts
Age 70 1/2 Required Minimum Distributions	Yes	No	No

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