Traditional IRA | Retirement Savings Plans
Savings and Social Security alone won't be enough for retirement. A traditional IRA (Individual Retirement Account) is a great way to save money to supplement your retirement income. Even if you're already contributing to your company's 401(k) plan, consider a traditional IRA as the next building block towards building a more comfortable retirement.
Traditional IRAs differ from Roth IRAs in that money going in is pre-tax, so you only pay taxes when you withdraw.
IRAs offer certain tax advantages and benefits that can help you now (and later).
- Tax-deductible contributions - Contributions to a traditional IRA are fully deductible if neither you nor your spouse participates in an employer-sponsored retirement plan (401(k), 403(b) or pension plan).
- If you or your spouse do contribute to an employer-sponsored retirement plan, the amount you can deduct depends on your adjusted gross income (AGI). Refer to IRS Publication 590 for deduction information, or talk to your financial advisor.
- Tax-deferred earnings - For all investors, earnings in a traditional IRA are tax-deferred. This means, you do not pay taxes on earnings until you withdraw them.
Traditional IRAs are available to all investors (up to age 70½) with earned income at least equal to the amount contributed.
The maximum annual contribution limits are:
In addition to the contribution limits, individuals age 50 and over will be able to make "catch-up contributions" of $1,000 per year on top of the annual contribution limit.
|Exceptions to Penalty|
For more information about the traditional IRA, talk to your financial advisor today.
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