IRAs
Longer life expectancies and early retirements make sound retirement planning essential. Your retirement planning may include an Individual Retirement Account (IRA).
Retirement planning with IRAs is simple:
- Learn about IRA options (traditional IRA, Roth IRA, Roth Conversion IRA, Rollover IRA).
- Determine your eligibility.
- Call us today.
Traditional IRAs
Traditional IRAs are the most basic IRA available for retirement planning and offer potential deductible contributions and tax-deferred growth.
Eligibility
Individuals under the age of 70 1/2 with earned income.
Contribution Guidelines
Deductible contribution limits depend upon the individual's participation in an employer-sponsored plan and modified adjusted gross income but for 2019 cannot exceed 100% of income or $6000, whichever is less.
Additional "catch-up contributions" of $1000 are allowed for people age 50 and over.
Distribution Rules
Withdrawals before age 59 1/2 are subject to income tax and a 10% penalty. The penalty is not assessed in special situations. Distributions must begin by April 1 of the year following the year the individual reaches age 70 1/2.
Contribution Timeframes
The account must be set up and contributions made by April 15 in order to be considered qualifying contributions for the previous tax year.
Roth IRA
Another retirement planning option is the Roth IRA.
The Roth IRA offers non-deductible contributions to eligible individuals. Distributions are received income tax-free if requirements are met.
Eligibility
Individuals with earned income and whose modified adjusted gross income is within specific limits.
Contribution Guidelines
Contributions are not deductible. Maximum contributions depend upon the individual's modified adjusted gross income, but for 2019 cannot exceed 100% of earned income or $6000, whichever is less.
Additional "catch-up contributions" of $1000 are allowed for 2019 for people age 50 and over.
Roth IRA income limits
The income limit for contributing the maximum to a Roth IRA will go up by $2,000 for singles from $120,000 in 2018 to $122,000 in 2019. It will go up by $4,000 for married filing jointly from $189,000 in 2018 to $193,000 in 2019. You can’t contribute anything directly to a Roth IRA when your income goes above $137,000 in 2019 for singles and $203,000 in 2019 for married filing jointly.
Distribution Rules
Withdrawals of earnings before age 59 1/2 are generally subject to both income tax and a 10% penalty, except in special situations.
Please note the Roth IRA contributions may be distributed at any time for any reason without incurring income tax or a penalty.
Distributions are not mandatory at any age.
Contribution Timeframes
The account must be set up and contributions made by April 15 to qualify as a contribution for the previous tax year. There is no maximum contribution age; as long as there is earned income, an individual can contribute.