IRAs and tax-sheltered annuities

I am a 61-year-old teacher contributing to a tax-sheltered annuity (TSA) and my teacher retirement plan. I don't know if I am eligible for an IRA (individual retirement account) or even if it would be worthwhile for the short length of time I would participate. -- L. P.

You are eligible for an IRA, but it would probably not be worth your while to sign up for one. Unless you are already at the limit of what can be put in a TSA - 20 percent of your gross salary - you should increase your TSA contribution. This is not only true of older workers, but applies to anyone eligible for a tax-sheltered, or tax-deferred, annuity. Generally, the withdrawal penalties in a TSA are less, and since most TSAs work on a payroll-deduction system, contributions are automatic.

An exception may apply to people who want more flexibility and control over their retirement money. If you think you can get better performance in an IRA from a bank, mutual fund, or other investment vehicle than your company is getting from its TSA, it may be worth your time and effort to try.