IRA FAQs
1. Are contributions tax deductible?
- TRADITIONAL - Yes, unless your income exceeds certain limits and you or your spouse is active in an employer sponsored plan.
- ROTH - No
- EDUCATIONAL - No
2. Are earnings taxed if withdrawn after age 59 1/2?
- TRADITIONAL - Yes
- ROTH - No, if the funds have been in the account for at least five years.
- EDUCATIONAL - Educational IRAs need to be used before the beneficiary is 30.
3. Is there a maximum annual adjusted gross income limit for contributions?
- TRADITIONAL - No
- ROTH - Yes. Your income must be less than $110,000 if you are a single filer, or less than $160,000 if you and your spouse file jointly.
- EDUCATIONAL - Yes. Your income must be less than $110,000 if you are a single filer, or less than $160,000 if you and your spouse file jointly.
4. Do you have to keep your IRA in the same account forever?
No. IRAs permit you to transfer, tax-free, IRA assets to a different
trustee (financial institution or broker). If you leave an employer, it
may be possible to have your accumulated pension benefits moved into an
IRA under your control. If you are switching jobs, you can also use an
IRA as a holding account.
5. What if you need some, but not all, of your IRA assets?
It is possible to move part of the withdrawal tax-free into another IRA
and keep the rest of it. Of course, the amount you keep will generally
be taxable and may be subject to the 10% early withdrawal tax.
To begin planning your retirement, call us today at (800) 695-1325.
