Retirement Accounts

Planning for retirement will be one of the most important decisions you will have to make in your lifetime. 

Because retirement accounts are a primary savings vehicle and the choices are many, let one of our investment professionals help navigate you through the many plan types, benefits, and features of a retirement account.  They can offer a customized solution that’s right for you.

Roth IRA (Individual Retirement Account)

The Roth IRA allows you to invest your after-tax dollars today for retirement tomorrow.  Direct contributions made to a Roth IRA may be withdrawn tax fee at any time, and earnings within the Roth IRA are not taxed upon withdrawal provided certain conditions are met.1

You can contribute to a Roth IRA if you have earned income from employment equal to the amount you contribute and up to maximum annual contribution limit.  There is no 70 ½ age limit on contributions.  You simply need to have earned income.

Restrictions:

  • Contributions are not tax deductible
  • Maximum contribution limits apply and earned income limits may apply
  • You must retain your account for a minimum of 5 years

Benefits:

  • No age limit on contributions
  • No Required Minimum Distributions after age 70 ½
  • No penalty applied on withdrawals made after age 59 ½
  • Tax-free growth on earnings

If you have little or no earned income, are married and file jointly, you may contribute using the spousal rules.  There are income thresholds that may reduce the amount you can contribute or unless your combined income is too high.  Consult a tax professional for additional advice.

1 To qualify for the tax-free and penalty-free withdrawal of earnings, 1) a Roth IRA must be in place for at least five tax years, and 2) the distribution must take place after age 59 ½, or due to death, disability, or a first-time home purchase (up to a $10,000 lifetime maximum).  Depending on state law, Roth IRA distributions may be subject to state taxes.

Some IRAs have contribution limitations and tax consequences for early withdrawals.  For complete details, consult your tax advisor or attorney.

Contact one of our investment professionals to obtain more information.

Traditional IRA (Individual Retirement Account)

A traditional IRA allows you to contribute an amount up to the maximum annual IRS contribution limits – not to exceed your earnings from employment.  There is a 70 ½ age limit on contributions.  You need to have earned income to contribute.  Required Minimum Distributions (RMDs) are required to begin at age 70 ½.

Contributions may be fully tax deductible depending on your income level, tax-filing status, or other factors.  Your traditional IRA grows tax-deferred until you withdraw funds from your account. 

Your traditional IRA may be converted to a Roth IRA.  Converting from a traditional IRA to a Roth IRA is a taxable event.

If you have little or no earned income, are married and file jointly, you may contribute using the spousal rules.  There are income thresholds that may reduce the amount you can contribute or unless your combined income is too high.  Consult a tax professional for additional advice.

Distributions from traditional IRAs and employer-sponsored retirement plans are taxed as ordinary income, and if taken prior to reaching age 59 ½, may be subject to an additional 10% early withdrawal penalty (IRS tax penalty).  Consult a tax professional before taking a distribution.

Some IRAs have contribution limitations and tax consequences for early withdrawals.  For complete details, consult your tax advisor or attorney.

Contact one of our investment professionals to obtain more information.

SEP IRA (Simplified Employee Pension Individual Retirement Account)

A SEP IRA is designed to allow self-employed individuals and business owners to establish a tax-deferred retirement plan.  The employer’s contributions are tax-deductible.

Eligibility requirements are:

  • Must be a sole proprietor
  • A business owner (any size)
  • In a partnership
  • Earn self-employment income by providing a service
  • Follow steps to set up a plan according to IRS requirements

Contributions are only made by the employer – employees cannot contribute to their own account.  The employer contribution may vary each year and the amount can range between 0% and 25% of the employee’s compensation not to exceed the maximum SEP IRA contribution limits set by the IRS.  Each eligible employee must receive the same percentage, and they are fully vested in their SEP account.

Investment earnings and dividends grow tax-deferred until funds are withdrawn from the account.

The cost to establish a SEP IRA is generally inexpensive, easy to set up, and does not require annual IRS filings.  Before establishing an employer-sponsored retirement plan, be sure to consult with a tax advisor and/or attorney for more information on establishing a retirement plan.

Distributions from SEP IRAs and employer sponsored retirement plans are taxed as ordinary income, and if taken prior to reaching age 59 ½, may be subject to an additional 10% early withdrawal penalty (IRS tax penalty). 

Some IRAs have contribution limitations and tax consequences for early withdrawals.  For complete details, consult your tax advisor or attorney.

Contact one of our investment professionals to obtain more information.

SIMPLE IRA (Savings Incentive Match Plan for Employees)

A SIMPLE IRA is designed to allow self-employed individuals and businesses with 100 employees or fewer to establish a tax-deferred retirement plan.  The employer contributes to the account and the employee may contribute to the retirement account.

Employer matching or non-elective contributions are tax-deductible.  Contributions by employees are made on a pre-tax basis through salary deferral.

Eligibility requirements are:

  • There cannot be any other retirement plan currently offered
  • A small business owner
  • Employer with 100 or fewer employees
  • Employees must meet minimum requirements to participate in plan
  • Follow steps to set up a plan according to IRS requirements

Contributions by the employer must match employee/participant contributions up to 3% of compensation or make a 2% non-elective contribution for each eligible employee, if the employee does not contribute to their own account.

Investment earnings and dividends grow tax-deferred until funds are withdrawn from the account.

The cost to establish a SIMPLE IRA is generally inexpensive, easy to set up, and does not require annual IRS filings.  Before establishing an employer-sponsored retirement plan, be sure to consult with a tax advisor and/or attorney for more information on establishing a retirement plan.

Distributions from SIMPLE IRAs and employer sponsored retirement plans are taxed as ordinary income, and if taken prior to reaching age 59 ½, may be subject to an additional 10% early withdrawal penalty (IRS tax penalty). 

Some IRAs have contribution limitations and tax consequences for early withdrawals.  For complete details, consult your tax advisor or attorney.

Contact one of our investment professionals to obtain more information.
 

 

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