Traditional IRAs Offer Tax Advantages Now… and Later
Safeguard your retirement savings with a Traditional Individual Retirement Annuity (Traditional IRA)1 that offers advantages now and in the future. Flexibility is one feature that makes it a valuable tool for creating a long‐term plan to meet your retirement needs.
Individuals Who Choose Traditional IRAs:
- Enjoy potential tax‐deductible contributions based on their Modified Adjusted Gross Income (MAGI), tax filing status and coverage by an employer‐sponsored plan at work
- Eliminate paying taxes on earnings until they are withdrawn (a tax advantage for those in lower tax brackets when they retire)
- Have the option of withdrawing funds at any time, although withdrawal before age 59‐1/2 in certain situations may incur a 10 percent early distribution penalty
- Have the ability to participate in additional employer-sponsored plans, although it may affect eligibility for tax deductions
Traditional IRAs also are useful for transferring money in several ways:
- To defer taxes by rolling over funds from an employer-sponsored plan like a 401(k)
- To move funds to a Roth IRA.
In order to contribute to a Traditional IRA, one must:
- Have an earned income equal to their contribution amount for that year, and
- Not reach age 70-1/2 by the end of the calendar year in which they will contribute.
At age 70‐1/2, individuals must start taking a Required Minimum Distribution (RMD). The first RMD is required by April 1 of the year following the year a person reaches age 70-1/2. Additional distributions thereafter need to be taken by Dec. 31 each year.
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Your Representative will prepare a customized plan that best meets your specific needs and budget. Get started by connecting with your Representative below.
WEB67 - 1/18/2019