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Contribution Assumptions
The IRA Evaluator is intended to serve as an educational tool, not investment or tax advice. Your circumstances are unique; therefore, you should consult an investment professional if you feel you need more personal advice. Because your circumstances will probably change over time, it is a good idea to review your financial strategy periodically to be sure it continues to fit your situation. All examples are hypothetical and are intended for illustrative purposes only. The Contribution Analysis Summary provided by the IRA Evaluator is an estimate of your contributions' future value based on your responses to the questions on the IRA Evaluator questionnaire screens. The estimated value of your contributions is not intended to be indicative of future performance of Traditional IRAs, Roth IRAs, or taxable accounts.
The actual future value at the end of the accumulation period of each investment may be higher or lower based on the following:

bullet Your actual tax rate during the accumulation period may be higher or lower. This can be dependent on deductions for which you are eligible, if your adjusted gross income is substantially higher or lower for a period of time, etc. Additionally, the tax rate on a taxable account could be higher or lower, depending on the holding period of the assets and the type of investment. Toward this end, you should use your effective tax rates, taking into consideration the tax rates you would actually be subject to net of deductions, when specifying your federal and state tax rates. The IRA Evaluator uses an aggregate of the specified federal and state tax rates in calculating the return on a taxable account, as well as on any reinvested tax savings from a deductible Traditional IRA. You should be aware that state tax laws vary, and you should check with your tax advisor to verify how each of these accounts would be taxed in your state.
bullet Your investments' performance may produce higher or lower earnings. Securities that have the potential to provide a higher rate of return are associated with a higher level of risk. Many people seek to invest in securities with a lower level of risk as they get closer to retirement. Actual investment returns will vary, particularly in the long term.
bullet Your adjusted gross income may increase or decrease at some point in the future and may determine how much you can contribute on a tax-deductible basis, how much you feel comfortable contributing, or to which account you are eligible to contribute, and if you contribute according to the contribution schedule specified.
Recharacterizing Contributions
If you erroneously convert a Traditional IRA to a Roth IRA or otherwise wish to change the nature of an IRA contribution, you may recharacterize such conversions and contributions prior to the due date of your tax return (including extensions) without penalty. Certain restrictions may apply. All questions concerning recharacterization, including whether it is appropriate for your individual tax situation, should be directed to your tax advisor. You may also wish to consult a tax advisor to determine if your estimated tax payments will need to be adjusted as a result of a recharacterization of an IRA. The IRS has generally limited the number of "reconversions" of previously converted and recharacterized assets. Beginning on January 1, 2000, you generally will not be permitted to minimize taxes by reconverting IRA assets before the later of: January 1 of the taxable year following the taxable year in which the amount was first converted to a Roth IRA or the end of the 30 day period beginning on the day on which you recharacterized the amount from the Roth IRA back to a traditional IRA. You should consult a tax advisor to more fully understand the regulations surrounding reconversions in the year 2000 and beyond. Any reconversions above the set limit will be deemed an "excess reconversion" and the IRS will require the taxable portions of the last eligible reconversion be included in income for the taxable year of the conversion.
Note: Since excess reconversion can result in tax consequences, you should consult a tax advisor regarding all recharacterizations and reconversions.
Accumulation Period Assumptions
The accumulation period assumptions used by the IRA Evaluator are listed below:
bullet All accumulation period calculations use the rates you specify for rate of return on investments, federal tax rate, and state tax rate for the accumulation period.
bullet The Traditional IRA and Roth IRA earn the specified rate of return, and are not taxed during the accumulation period.
bullet The accumulation period runs from your current age to your Retirement age. When eligible for a Traditional IRA the maximum Retirement age you can select is 70. If you are currently older than 70 then the maximum retirement age is age 115.
bullet The tax savings and the taxable account earn an after-tax rate of return. The after-tax rate of return is equal to the specified [rate of return] less [the rate of return multiplied by the aggregate tax rate]. For tax calculations, the Evaluator uses an aggregate rate equal to the specified federal tax rate plus the state tax rate.
bullet Contributions are made to each account (Traditional IRA, Roth IRA, and Taxable Account) on July 1 of each year.
bullet Contributions will remain equal for all years through the last year that a contribution is made if you select a specific dollar amount.
bullet Contributions based on the maximum allowed contribution every year will adjust based on the increased contribution limits.
Contribution Limits
Prior to 2002, IRA contribution limits for eligible individuals were $2,000 per year (aggregated amongst all IRA contributions). Current contribution limits are charted below:
Workers age 50 and older can make additional "catch-up" contributions. These annual limits are $1,000 for 2006 and subsequent years.
Tax Years Annual Contribution Limit Annual Catch-Up Contribution for Owner at Least Age 50 Maximum Annual Contribution Limit for Owner at Least Age 50 (including Catch-Up)
2006-2007 $4,000 $1,000 $5,000
2008 and thereafter $5,000* $1,000 $6,000

bullet * After 2008 IRA contribution limits are subject to Cost of Living Adjustments (COLA). Limits are indexed for inflation in $500 increments.
bullet If you indicate that you plan to make the maximum allowed contribution then the tool will included the 'Catch-up' contribution for the year in which you turn age 50 and thereafter.
bullet The provisions included in the Economic Growth and Tax Relief Reconciliation Act of 2001 ("EGTRRA") are due to expire in 2010. The tool assumes that legislation will be enacted to extend the provisions.
bullet The annual contribution amount defaults to the maximum per person contribution amount, with the following exception. If your adjusted gross income (AGI) is less than the allowable for the tax year in which you are making the analysis then the annual contribution defaults to your adjusted gross income rounded to the next highest $10. However, if your AGI is between $1 and $200, inclusive, the annual contribution amount defaults to $200.
Important Note: The maximum IRA contribution you would actually be eligible to make in would be limited to the lesser of 100% of your compensation or the contribution limit for the year of analysis. This tool uses your AGI (and your participation in an employer-sponsored plan, in the case of a deductible Traditional IRA) to determine whether you meet the eligibility requirements.
bullet It is assumed that you will deduct the maximum eligible portion of a Traditional IRA contribution, and will file IRS Form 8606 annually to declare any non-deductible IRA contributions.
bullet If you have specified that you would invest any tax savings due to deducting part or all of a Traditional IRA contribution, that tax savings amount is shown as a separate account titled "Tax Savings". The annual tax savings are invested on December 31 of each year during the accumulation period, and earn the after-tax rate of return.
bullet Earnings on each account are reinvested on December 31 of each year during the accumulation period.
bullet The default rate of return on investments during the accumulation period is 9%. If you wish, you can change this rate to create a different investment scenario.
bullet Life expectancy: Is calculated based on current age and information provided. Life Expectancy is the age at which the tool assumes distributions will end.
bullet Adjustment: The IRA Evaluator adds five years to estimated life expectancy to calculate Adjusted Life Expectancy.

Value at Start of Retirement Graph Assumptions
This graph uses the Accumulation Period Assumptions and shows an estimate of your contribution assets' estimated value as of the end of the accumulation period (Retirement age) (December 31 of the last year in which you specified that an IRA contribution will be made; this is also the beginning of the distribution period). The graph compares the assets' estimated value if invested in a Traditional IRA, Roth IRA, or a taxable account. If you specified that you would reinvest any tax savings due to deducting Traditional IRA contributions, the graph also shows the estimated value of investing those tax savings throughout the accumulation period. The Taxable Account and Tax Savings are shown net of an aggregate of federal and state taxes. IRA amounts are shown before taxes because IRAs are not taxed during the accumulation period. All amounts shown in the graph are estimates and your actual amounts may vary.
The IRA Evaluator uses the following assumptions to prepare this graph:

bullet The Traditional IRA value includes annual contributions and earnings growing tax-deferred at the specified annual rate of return.
bullet If applicable, the tax savings value is the annual tax savings from each year's deduction for tax-deductible IRA contributions that is shown as invested in a taxable account at the end of each year, plus earnings growing at a specified annual rate of return after taxes on the earnings are deducted. This value displays if you are eligible for a tax-deductible contribution to a Traditional IRA and have specified that you plan to reinvest the tax savings in a taxable account.
NOTE: If you plan to reinvest the tax savings each year, you should consider the combined estimated future values of the Traditional IRA and Tax Savings when comparing to the estimated future value of the Roth IRA.
bullet The Roth IRA value includes annual non-deductible contributions and earnings that grow tax-free at the specified annual rate of return.
bullet The taxable account value includes annual investments in the specified amount to a non-retirement account earning the specified annual rate of return after taxes on the earnings are deducted.

Distribution Period (Retirement) Assumptions
The distribution period assumptions used by the IRA Evaluator are listed below:
bullet All distribution period calculations use the rates you specify for rate of return on investments, federal tax rate, and state tax rate for the distribution period.
bullet For tax calculations, the Evaluator uses an aggregate rate equal to the specified federal tax rate plus the state tax rate.
bullet The tax savings and the taxable account earn an after-tax rate of return. The after-tax rate of return is equal to the specified [rate of return] less [the rate of return multiplied by the aggregate tax rate]. For tax calculations, the Evaluator uses an aggregate rate equal to the specified federal tax rate plus the state tax rate.
bullet Distributions are taken on July 1 of each year of the distribution period.
bullet Distributions from either a Roth IRA or a Traditional IRA before age 59½ may be subject to a 10% early withdrawal penalty, unless certain exceptions apply. Read "The Roth IRA vs. the Traditional IRA" on Fidelity's web site for more information. If you have specified that the distribution period will begin before age 59½, the IRA Evaluator assumes that your distributions qualify for an exception to the 10% early withdrawal penalty.
A. Traditional IRA distributions: Distributions from a Traditional IRA will be taxed as ordinary income.
B. Roth IRA distributions: The IRA Evaluator assumes that all assets withdrawn from a Roth IRA meet the following requirements for a qualified distribution, and therefore no taxes or penalties apply.
You have one 5-year Aging Period for all of your Roth IRAs for purposes of determining "qualified distributions." A qualified distribution is not included in your gross income for the year of the distribution provided it meets the following requirements:
1. It is made after the end of the 5-year Aging Period as defined below

and
2. It is made on account of one of the following reasons:
bullet you have reached age 59½
bullet you are disabled within the meaning of IRC §72(m)(7)
bullet you are using the proceeds for a first time home purchase as defined in IRC §72(t)(2)(F)
bullet you are deceased
The 5-Year Aging Period for qualified distributions begins on January 1 of the year for which you make your first annual contribution to any Roth IRA, or if earlier, January 1 of the year in which you make your first conversion contribution to any Roth IRA. The 5-Year Aging Period applies to all subsequent contributions (including conversion contributions) you make to a Roth IRA.
No qualified distributions can occur before taxable years beginning in 2003.
Important note: Be aware that if you have specified that your distributions will begin within 5 years of your initial contribution or conversion contribution, the IRA Evaluator does not calculate the taxes due on Roth IRA distributions in the year the distribution occurs. Under those circumstances, the Roth IRA estimates for the Distribution period may be inaccurate.
You should consult a tax advisor with respect to your individual situation before making a withdrawal from an IRA.

bullet Earnings on each investment are reinvested on December 31 of each year during the distribution period.
bullet The first distribution occurs one year after the last contribution is made (i.e., the last contribution is on 07/01/2002 and the first distribution is on 07/01/2003).
bullet The default annual rate of return on investments during the distribution period is 7%. If you wish, you can change this rate to create a different investment scenario.
bullet For the Traditional IRA, Roth IRA, taxable account, and tax savings, the amount that is distributed each year is determined using the balance as of December 31 of the last year in the accumulation period, the specified distribution period annual rate of return, and the number of years in the distribution period.
bullet Distributions are taken in equal annual portions throughout the distribution period with the following two exceptions:
1. The breakdown of Traditional IRA annual distributions and taxes in the Contribution Analysis Summary Report tables may vary for each year during the distribution period, although the combined total will remain the same. This is because it is assumed that any applicable taxes will be paid from the Traditional IRA distributions, and the ratio of nondeductible contributions to deductible contributions and tax deferred earnings is recalculated each year, affecting the taxable basis amount, and so the resulting taxes may vary.
2. Starting with the year you turn age 70½, the IRA Evaluator compares the equal annual portion amount against the amount of a Minimum Required Distribution, and uses whichever amount is larger for a given year.

Once you reach age 70½, the IRS generally requires you to withdraw at least a certain amount, called a Minimum Required Distribution, or MRD, from your Traditional IRAs each year. This requirement does not apply for Roth IRAs during the Account holder's lifetime.

On April 17, 2002 the IRS issued Final Regulations for determining Minimum Required Distributions from retirement accounts. These regulations are meant to clarify and simplify the process and will generally result in smaller required distributions than under the 1987 or 2001 proposed rules. These final regulations, may be used for calculating MRDs for 2002, or you may use the 1987 or the 2001 proposed Regulations for year 2002, but you must use the 2002 Final Regulations for 2003 and beyond. The IRA Evaluator uses the new 2002 Final Regulations to calculate MRDs. For Minimum Required Distributions, the following assumptions are made:
  bullet The first MRD will be taken in the year in which you turn age 70½.
  bullet Minimum Required Distributions are estimated using the IRS' Uniform Lifetime Table for all users. The IRA Evaluator does not take into account the one exception to the use of the Uniform Table for calculating MRDs. If your sole beneficiary for the entire year is your spouse, and your spouse is more than 10 years younger than you, the IRA Evaluator overestimates the amount of your MRD.
  bullet The account balance used in the calculation is the prior year's balance as of December 31, adjusted for any pending year end transfers or rollovers.
bullet In general, you should specify a distribution period (Retirement age) that begins at least five years after your age in the analysis year so that the tool can calculate tax effects on your Roth IRA estimates. You should only specify a distribution start age of less than five years from now if you are age 66½ or older, because the IRA Evaluator requires you to begin distributions no later than for the year you turn 70½, although for Roth IRAs, taxable accounts, and the tax savings, there is no requirement that you withdraw money during your lifetime. However, for purposes of comparing the Traditional IRA, Roth IRA, a taxable account, and the tax savings, the IRA Evaluator uses age 70½ as the maximum distribution start age for all of these accounts if you specify a later age (unless you are already over age 70½). If your birthday is on or before June 30, the maximum distribution start age will appear as 70, because you will be 70½ by the end of that year. If your birthday falls on or after July 1, the maximum distribution start age will appear as 71, because you will not reach 70½ until the year in which you turn 71.

Annual IRA Distributions Table Assumptions
The table uses the Distribution Period (Retirement) Assumptions, and shows a detailed breakdown of the distributions, earnings, and taxes for each year for the Traditional IRA, Roth IRA, taxable account, and tax savings throughout the distribution period (retirement).
NOTE: If you plan to reinvest the tax savings each year, you should consider the combined estimated distributions of the Traditional IRA and Tax Savings when comparing to the estimated distributions of the Roth IRA.
All amounts shown in the table are estimates and your actual amounts may vary. Due to rounding, the calculated results may vary by a few cents.
  bullet The IRA Evaluator uses the following assumptions to prepare the table:
  bullet For each year, the January 1st starting balance of each account is shown.
  bullet Earnings as of 12/31 of each year on that balance are estimated and added to the starting balance.
  bullet Unless MRD requirements apply (see Distribution Period Assumptions for further explanation), an annual total distribution amount is calculated by taking the projected future value of the account (including earnings), based on the number of years in the distribution period, and dividing this future value by the number of years in the distribution period (see Distribution Period Assumptions for further explanation). This annual total distribution amount is shown in two parts:
  1. Applicable taxes on the annual distribution amount are calculated using the specified aggregate federal and state tax rate.
  2. This tax total is subtracted from the total distribution amount to arrive at an annual after-tax distribution amount. The estimated total of all after-tax distributions throughout the distribution period for each account is shown on the Total of Distributions throughout Retirement Graph.

bullet The after-tax distribution amount and tax amount are subtracted from the starting balance and earnings to arrive at the year-end balance.
bullet Life expectancy: Is calculated based on current age and information provided. Life Expectancy is the age at which the tool assumes distributions will end.
bullet Adjustment: The IRA Evaluator adds five years to estimated life expectancy to calculate Adjusted Life Expectancy.
Total of Distributions throughout Retirement Graph Assumptions
The IRA Evaluator uses the Distribution Period Assumptions and the following assumptions to prepare the graph:
  bullet The Traditional IRA value includes the total of all distributions for all years during the distribution period after earnings on the remaining balance each year are added and applicable taxes on distributions are subtracted. The IRA Evaluator assumes that any applicable taxes are paid out of the Traditional IRA assets.
  bullet The Roth IRA value includes the total of all distributions for all years during the distribution period after earnings on the remaining balance each year are added. No taxes are subtracted because all Roth IRA earnings and distributions are assumed to be qualified distributions and therefore tax-free and penalty-free.
  bullet The taxable account value includes the total of all distributions for all years during the distribution period after yearly after-tax earnings on the remaining balance as of December 31 are added.
  bullet The tax savings value includes the total of all distributions for all years during the distribution period after yearly after-tax earnings on the remaining balance as of December 31 are added. This value is displayed only if you are eligible for a tax-deductible contribution to a Traditional IRA and you have specified that you would reinvest tax savings in a taxable account.

Assumptions for Conversions to a Roth IRA:
The IRA Evaluator is intended to serve as an educational tool, not investment or tax advice. All examples are hypothetical and are intended for illustrative purposes only.
The Conversion Analysis Summary provided by the IRA Evaluator is an estimate of the converted Traditional IRA assets' future value based on your responses to the questions on the IRA Evaluator questionnaire screens. The estimated value of the converted assets is not intended to be indicative of future performance of Traditional IRAs or Roth IRAs.
The actual future value during the distribution period of the converted assets and of a Traditional IRA, if not converted, may be higher or lower based on the performance of the investments. Securities that have the potential to provide a higher rate of return are associated with a higher level of risk. Many people seek to invest in securities with a lower level of risk as they get closer to retirement. Actual investment returns will vary, particularly in the long term.
Recharacterizing Contributions
If you erroneously convert a Traditional IRA to a Roth IRA or otherwise wish to change the nature of an IRA contribution, you may recharacterize such conversions and contributions prior to the due date of your tax return (including extensions) without penalty. Certain restrictions may apply. You may also wish to consult a tax advisor to determine if estimated tax payments will need to be adjusted as a result of a recharacterization of an IRA. The IRS has generally limited the number of "reconversions" of previously converted and recharacterized assets to one per year. Beginning on January 1, 2000, you generally will not be permitted to minimize taxes by reconverting IRA assets within a taxable year, although reconversions in the next taxable year will be permissible. You should consult a tax advisor to more fully understand the regulations surrounding reconversions in the year 2000 and beyond. Any reconversions above the set limit will be deemed an "excess reconversion" and the IRS will require the taxable portions of the last eligible reconversion be included in income for the taxable year of the conversion.
Note: Since excess reconversion can result in tax consequences, you should consult a tax advisor regarding all recharacterizations and reconversions.
Accumulation Period Assumptions
The accumulation period assumptions used by the IRA Evaluator are listed below:
  bullet All accumulation period calculations use the rates you specify for rate of return on investments, federal tax rate, and state tax rate for the accumulation period. These rates are assumed to remain constant throughout the accumulation period.
  bullet For tax calculations, the Evaluator uses an aggregate rate equal to the specified federal tax rate plus the state tax rate.
  bullet The Traditional IRA unconverted assets and the Roth IRA converted assets earn the specified rate of return, and are not taxed during the accumulation period.
  bullet The total value of dollars that would have been used to pay the conversion tax is estimated, and is called the Tax Savings of not converting. This amount is assumed to be invested in a taxable account on December 31 of the year of conversion. This taxable account earns the after-tax rate of return, calculated as the specified [rate of return] less [the rate of return multiplied by the aggregate tax rate]. The value of this Tax Savings account is included in the total value of the Traditional IRA. The Estimated Tax Due to Conversion analysis assumes that the taxable portion of the distribution is included in income for the analysis year. This additional income is taxed at the specified current income tax rate. If the amount to convert is less than the non-deductible contributions to an existing IRA, this analysis does not include the effects of any loss you may be eligible to claim, subject to certain requirements. You should consult a tax advisor for more information.
    It is assumed that all taxes due on Traditional IRA assets that are converted to a Roth IRA are paid using non-IRA assets. If you pay taxes using IRA assets and are not over age 59½, you generally will pay regular income tax and a 10% early withdrawal penalty on the assets liquidated to pay the conversion taxes. Consequently, it may be in your best interest to pay conversion taxes using non-IRA assets.
  bullet Conversions occur on January 1 of the year when the conversion occurs.
  bullet Earnings on each type of investment are reinvested on December 31 of each year during the accumulation period.
  bullet The default rate of return on investments during the accumulation period is 9%. If you wish, you can change this rate to create a different investment scenario.
Value at Start of Retirement Graph Assumptions
This graph shows an estimate of the converted assets' estimated value as of December 31 of the last year of the accumulation period, one-year before the first distribution occurs. The graph compares the assets' estimated value if invested in a Traditional IRA or a Roth IRA. All amounts shown in the graph are estimates and your actual amounts may vary.
The IRA Evaluator uses the following assumptions to prepare this graph:
  bullet The Traditional IRA value shows the sum of two totals:
-- Unconverted assets: An estimate of the total value of the assets if not converted plus earnings growing tax-deferred at the annual rate of return.

  -- Tax savings of not converting: An estimate of the total value of the dollars that would have been used to pay the conversion tax. This amount is shown as invested in a taxable account accumulating after-tax earnings growing at the annual rate of return.
  bullet The Roth IRA value includes the converted assets and tax-free earnings that grow at the annual rate of return.

Distribution Period (Retirement) Assumptions
The distribution period assumptions used by the IRA Evaluator are listed below:
  bullet All distribution period calculations use the rates you specify for rate of return on investments, federal tax rate, and state tax rate for the distribution period.
  bullet For tax calculations, the Evaluator uses an aggregate rate equal to the specified federal tax rate plus the state tax rate.
  bullet The Traditional IRA unconverted assets and the Roth IRA earns the specified rate of return throughout the distribution period.
  bullet The Tax Savings portion of the Traditional IRA earns the after-tax rate of return, calculated as the specified [rate of return] less [the rate of return multiplied by the aggregate tax rate].
  bullet Distributions are taken on July 1 of each year of the distribution period.
  bullet Distributions from either a Roth IRA or a Traditional IRA before age 59½ may be subject to a 10% early withdrawal penalty, unless certain exceptions apply. If you have specified that the distribution period will begin before age 59½, the IRA Evaluator assumes that distributions qualify for an exception to the 10% early withdrawal penalty.
  A. Traditional IRA distributions: Distributions from a Traditional IRA will be taxed as ordinary income.
  B. Roth IRA distributions: The IRA Evaluator assumes that all assets withdrawn from a Roth IRA meet the following requirements for a qualified distribution, and therefore no taxes or penalties apply.
    You have one 5-year Aging Period for all your Roth IRAs for purposes of determining "qualified distributions." A qualified distribution is not included in your gross income for the year of the distribution provided it meets the following requirements:
  1. It is made after the end of the 5-year Aging Period as defined below
    and
  2. It is made on account of one of the following reasons:
  bullet you have reached age 59½
  bullet you are disabled within the meaning of IRC §72(m)(7)
  bullet you are using the proceeds for a first time home purchase as defined in IRC §72(t)(2)(F)
  bullet you are deceased
  The 5-Year Aging Period for qualified distributions begins on January 1 of the year for which you make your first annual contribution to any Roth IRA, or if earlier, January 1 of the year in which you make your first conversion contribution to any Roth IRA. The 5-Year Aging Period applies to all subsequent contributions (including conversion contributions) made to a Roth IRA.
  No qualified distributions can occur before taxable years beginning in 2003.
  Important note: Be aware that if you have specified that your distributions will begin within 5 years of your initial contribution or conversion contribution, the IRA Evaluator does not calculate the taxes due on Roth IRA distributions in the year the distribution occurs. Under those circumstances, the Roth IRA estimates for the Distribution period may be inaccurate.
  You should consult a tax advisor with respect to your individual situation before making a withdrawal from an IRA.

  bullet Earnings on each investment are reinvested on December 31 of each year.
  bullet The default rate of return on investments during the distribution period is 7%. If you wish, you can change this rate to create a different investment scenario.
  bullet For both the Traditional IRA and Roth IRA, the amount that is distributed each year is determined using the balance as of December 31 of the last year of the accumulation period, the specified distribution period annual rate of return, and the number of years in the distribution period.
  bullet Distributions are taken in equal annual portions throughout the distribution period with the following two exceptions:
  1. The breakdown of Traditional IRA annual distributions and taxes in the Contribution Analysis Summary Report tables may vary for each year during the distribution period, although the combined total will remain the same. This is because it is assumed that any applicable taxes will be paid from the Traditional IRA distributions, and the ratio of nondeductible contributions to deductible contributions and tax deferred earnings is recalculated each year, affecting the taxable basis amount, and so the resulting taxes may vary. The calculations assume that you have no other non-Roth IRA assets.
  2. Starting with the year when you will be age 70½, the IRA Evaluator compares the equal annual portion amount for the unconverted Traditional IRA assets against the amount of a Minimum Required Distribution, and uses whichever amount is larger for a given year.

  bullet Once you reach age 70½, the IRS generally requires you to withdraw at least a certain amount, called a Minimum Required Distribution, or MRD, from your Traditional IRAs each year. This requirement does not apply for Roth IRAs during the Account holder's lifetime.
    On April 17, 2002 the IRS issued Final Regulations for determining Minimum Required Distributions from retirement accounts. These regulations are meant to clarify and simplify the process and will generally result in smaller required distributions than under the 1987 or 2001 proposed rules. These final regulations, may be used for calculating MRDs for 2002, or you may use the 1987 or the 2001 proposed Regulations for year 2002, but you must use the 2002 Final Regulations for 2003 and beyond. The IRA Evaluator uses the new 2002 Final Regulations to calculate MRDs. For Minimum Required Distributions, the following assumptions are made:
  bullet The first MRD will be taken in the year in which you turn age 70½.
  bullet Minimum Required Distributions are estimated using the IRS' Uniform Lifetime Table for all users. The IRA Evaluator does not take into account the one exception to the use of the Uniform Table for calculating MRDs. If your sole beneficiary for the entire year is your spouse, and your spouse is more than 10 years younger than you, the IRA Evaluator overestimates the amount of your MRD.
  bullet The account balance used in the calculation is the prior year's balance as of December 31, adjusted for any pending year end transfers or rollovers.
bullet In general, you should specify a distribution period that begins at least five years after your age in the analysis year so that the tool can calculate tax effects on your Roth IRA estimates. You should only specify a distribution start age of less than five years from now if you are age 66½ or older, because the IRA Evaluator requires you to begin distributions no later than for the year you turn 70½, although for Roth IRAs, taxable accounts, and the tax savings, there is no requirement that you withdraw money during your lifetime. However, for purposes of comparing the Traditional IRA, Roth IRA, a taxable account, and the tax savings, the IRA Evaluator uses age 70½ as the maximum distribution start age for all of these accounts if you specify a later age (unless you are already over age 70½). If your birthday is on or before June 30, the maximum distribution start age will appear as 70, because will be 70½ by the end of that year. If your birthday falls on or after July 1, the maximum distribution start age will appear as 71, because you will not reach 70½ until the year in which you turn 71.
bullet Annual IRA Distributions Table Assumptions
bullet The table uses the Distribution Period (Retirement) Assumptions, and shows a detailed breakdown of the distributions, earnings, and taxes for each year for the Traditional IRA and Roth IRA throughout the distribution period (retirement). All amounts shown in the table are estimates and the actual amounts may vary. Due to rounding, the calculated results may vary by a few cents.
bullet The IRA Evaluator uses the following assumptions to prepare the table:
  bullet For each year, the January 1st starting balance of each account is shown.
  bullet Earnings as of 12/31 of each year on that balance are estimated and added to the starting balance.
  bullet Unless MRD requirements apply (see Distribution Period Assumptions for further explanation), an annual total distribution amount is calculated by taking the projected future value of the account (including earnings), based on the number of years in the distribution period, and dividing this future value by the number of years in the distribution period (see Distribution Period Assumptions for further explanation). This annual total distribution amount is divided in two parts:
  1. Applicable taxes on the annual distribution amount are calculated using the specified aggregate federal and state tax rate. For the Roth IRA, no taxes are subtracted because all Roth IRA earnings and distributions are assumed to be qualified distributions and therefore tax-free and penalty-free.
  2. This tax total is subtracted from the total distribution amount to arrive at an annual after-tax distribution amount. The estimated total of all after-tax distributions throughout the distribution period for each account is shown on the Total of Distributions throughout Retirement Graph.

  bullet The after-tax distribution amount and tax amount is subtracted from the starting balance and earnings to arrive at the year-end balance.
Total of Distributions throughout Retirement Graph Assumptions
The IRA Evaluator uses the Distribution Period Assumptions and the following assumptions to prepare this graph:
  bullet The Traditional IRA value shows the sum of two totals:
--An estimate of the total distributions throughout the distribution period of the assets if left in a Traditional IRA.

  bullet --An estimate of the total distributions throughout the distribution period from a taxable account in which the dollars that would have been used to pay the conversion tax have been invested.
  bullet The Roth IRA value includes the total value of all distributions for all years during the distribution period.



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BUILD: WS-IRAEVAL-1.3_S11, DATE: Mon Dec 22 13:36:58 EST 2003 fiap411:IRA1