Individual Retirement Account

Do you...

  • Want to save beyond your 401(k)?

  • Know the difference between a traditional and a Roth IRA?

Things to consider

An IRA gives you the opportunity to save for a better retirement. Your earnings can grow tax-deferred, and you’ll have flexibility in investment choices not usually found in employer-sponsored plans. To save a little more beyond your 401(k), consider an IRA.

There are two types: traditional IRA and Roth IRA, and there are few ways they differ from each other, including tax implications, age limits, and income caps.

Traditional IRA

  • Contributions can be tax-deductible 
  • Earnings grow tax-deferred 
  • Withdrawals are taxable when distributed 
  • Must be under 70 ½ to contribute 
  • Rollover contributions allowed at any age

Roth IRA

  • Contributions are not tax-deductible 
  • Contributions have potential for tax-free earnings and withdrawals 
  • Rollover contributions allowed at any age 
  • Income caps apply

We can help

For a traditional IRA, contributions can be tax-deductible, and earnings grow tax-deferred. Withdrawals are taxable when distributed. Contributions to a Roth IRA are not deductible, but have the potential for tax-free earnings and withdrawals. To contribute to a traditional IRA, you need to be younger than 70 ½. But you can contribute to a Roth IRA and make rollover contributions to either type regardless of your age.

If your income exceeds a certain limit, you might not be able to contribute to a Roth IRA, or you might only be eligible for reduced contributions. You can contribute to a traditional IRA regardless of your income, but your contributions will be limited to the lesser of $5500 if under age 50, or your earned income for the year. Whether those contributions are deductible depends on your income and other factors.

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