Retirement may seem far away, but it's never too early to determine how much you'll need and begin the process of saving. Making smart financial decisions now can help impact how you live in retirement. We can assist you along the way with an IRA to help you reach your retirement goals.
Related Information
IRA'S
What is an IRA?
Individual retirement accounts (IRAs) allow income earners – and in certain cases, their unemployed spouses – to save for retirement on a tax-deferred basis.
IRA contributions and earnings accumulate in a trust or custodial account, with a bank, federally insured credit union, savings and loan association, or other organization acting as trustee. Investors have a number of financial products to choose from when funding their IRA.
The IRA may be either a Traditional IRA or a Roth IRA.
With a traditional IRA, contributions may be tax-deductible, and tax is deferred on contributions and earnings until the money is withdrawn, typically at retirement.
With a Roth IRA, by contrast, contributions are never tax-deductible. But unlike a traditional IRA, contributions are not taxed when withdrawn. Earnings on Roth contributions may also be withdrawn tax-free under certain circumstances.
Limits on how much may be contributed annually are the same for both traditional and Roth IRAs, or a combination of the two, and vary by age, year of contribution and income.
No taxes are due until the IRA owner begins withdrawing the funds, typically at retirement (Roth IRA withdrawals may be tax free). A federal tax penalty may apply if non-qualified withdrawals are made prior to age 59 1/2.
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This information is not written or intended as tax or legal advice and may not be relied on for purposes of avoiding any federal tax penalties. Individuals are encouraged to seek advice from their own tax or legal counsel.