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Eliminate paying taxes on earnings until they are withdrawn (a tax advantage for those in lower tax brackets when they retire)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.
View Annuity Rates