When can I invest in an IRA?

You can open an IRA and invest funds for any given year up to the date your federal income tax return for that year is due (including extensions).

For most people, that means you have until April 15, 1983, to open an account and deposit funds on behalf of 1982 earnings.

If you will be out of the country next year and thus have an automatic extension to June 15 for filing your 1982 tax return, the closing date for 1982 payments into an IRA also will be extended to June 15, 1983.

But there is an advantage to investing funds early. As explained last week, income earned by the money in your IRA is exempt from tax until it is withdrawn. So the earlier you deposit funds in the account, the earlier you reap the benefit of tax deferral on earnings.

Must I invest the whole $2,000?

You can invest as little or as much as you want at any time, subject only to the annual $2,000 limit ($2,250 if you open a spousal IRA). Some sponsors of IRA plans may have a minimum deposit amount, but there is none in the law.

So you may set up a program in which you invest as little as $25 or $50 at a time, as you can spare the money.

And there is no requirement that you reach the maximum amount for the year. If you can only afford $500 or $1,000, get into the program anyway. You reap the same tax benefits, only on a smaller scale.

It is not necessary that you make an investment every year. You may invest $2,000 for 1982, then find next year that financial circumstances prevent any deposit at all. And in 1984 you may only be able to afford $1,200. No problem--this is a self-tailored retirement program, and you select the amount you wish to invest each year.

Of course you must realize that if you invest less than the maximum amount, the accumulating total in your fund will be less than it would be if you deposited the full $2,000 each year.

Can I get the money out?

Normally the money in an IRA is not available to you until you reach age 59 1/2. At that time you may withdraw any part or all of the funds in the account without penalty.

The amount withdrawn in any year is simply added to your other income and taxed at your regular rate. Presumably you will have retired and will have less income, thus be subject to a lower rate of tax than during your working years.

If you withdraw funds before reaching age 59 1/2 you will be subject to a tax penalty of 10 percent of the amount withdrawn, in addition to the normal tax liability.

You may not borrow money from your IRA or use the account as security for a loan prior to age 59 1/2. Either of these transactions is considered a withdrawal subject to the 10 percent penalty.

The penalty does not apply if you become totally and permanently disabled before you are 59 1/2. In that case the IRA funds are available to you subject only to normal income tax on the amount withdrawn.

Should you die before reaching 59 1/2, the money in the IRA is immediately payable to your beneficiary or heirs without penalty.

Can I leave the money for my estate?

You must begin to withdraw funds at least annually no later than the end of the year in which you reach the age of 70 1/2.

Total distributions for each year must be large enough to deplete the account by the end of your normal life expectancy based on your age at the time withdrawals start.

If you're married when you begin distributions, you can base the minimum withdrawal amount on the combined life expectancy of you and your spouse. The IRS has life expectancy tables set up for these calculations.

An annual 50 percent excise tax is imposed on "excess accumulations" in your account after the year in which you reach age 70 1/2. An excess accumulation is the difference between the amount that should have been withdrawn (based on the tables and the balance in the account) and the amount actually distributed.