An Individual Retirement Account makes sense when planning your retirement or investment future.
Your Social Security benefits and pension are not intended to provide all of your retirement income. And, planning ahead to pay for an education, buy a house, or fund any future goal is always wise.
Today's IRAs provide more tax benefits and greater earnings than in previous years. You can build a series of IRAs: Traditional, Roth and Educational. We also offer IRA Share Certificates. Consult your tax advisor to determine which IRA is right for you.
The traditional deductible may be the best choice for you depending on your age and your needs.
- If you are not a participant in an employer-sponsored retirement plan, you may be eligible.
- A single taxpayer or married filing jointly may be allowed to make fully deductible contributions.
- A single taxpayer or married filing jointly may be allowed to make reduced deductible contributions.
- A non-working spouse may be eligible for fully deductible contributions if the spouse participates in a qualified retirement plan.
- A working spouse may be eligible to contribute to their own IRA.
- If you are under age 70 ½ and have earned income, you are eligible.
These are the guidelines for a deductible IRA:
A maximum of up to $5,500 per year for single. For owners age 50 and over, you may contribute a maximum of $6,500.
Contributions can be made for the previous tax year up to April 15th of the current year.
Money may be withdrawn before age 59 ½ to purchase a first home (up to $10,000 maximum) or pay qualified costs of a higher education.
- Earnings are tax-deferred.
- Any earnings and deductible contributions are taxed as ordinary income in the year the money is withdrawn.
Talk to your accountant or tax advisor about your Traditional IRA options, then come and see us to open yours. You may also request more information now.
The major advantage of this IRA is that you pay taxes on your yearly contributions, but long-term accumulation and future withdrawals are tax free. This IRA also offers some estate advantages.
Some key elements of the non-deductible Roth IRA are:
Penalty-free withdrawals after 5 years
Earnings are tax-deferred and withdrawals are tax-free if the account is open for 5 tax years and withdrawals are for a qualified reason (ie. age 59 ½, disability, death, or a first-time home purchase 'limit $10,000')
Contributions allowed after age 70 ½ when employed
No required distribution at age 70 ½ or in your lifetime
Talk to your accountant or tax advisor about your Roth IRA options, then come and see us to open yours. You may also request more information now.