Individual Retirement Accounts

For Individuals

Invest in a Traditional or Roth IRA

Whatever your age, whatever your personal or professional situation, an IRA can offer both businesses and individuals benefits that other investments do not. Perhaps most important of all these benefits, an IRA gives you the opportunity to grow your money tax-deferred than if they were in a comparable taxable investment.

You can contribute up to $5,500 in 2017 to any combination of Traditional or Roth IRAs. This contribution amount rises each year. Here are some key features of each IRA to help you select the IRA best suited to your needs.

With a Traditional IRA…

  • Anyone with earned income and under the age of 70 ½ can contribute.
  • Your contributions can potentially grow tax-deferred.
  • If you qualify, you can enjoy current tax savings by deducting your annual contribution.1
  • You must begin taking distributions once you reach age 70 ½.
  • Taxes on your earnings and any deductible annual contributions are deferred until withdrawn. During retirement it is likely that you will be in a lower tax bracket when making withdrawals, so over the long run you can save on taxes.

With a Roth IRA…

  • You can make contributions at any age, provided you have earned income and meet income eligibility criteria.
  • Contributions are not tax deductible from your current income taxes.
  • Earnings and contributions are tax free upon withdrawal after age 59 ½ provided the account is at least 5 years old or you meet certain other qualifying rules.
  • You are not required  to begin making distributions after age 70 ½ or at any age so money can remain in a Roth IRA for the benefit of heirs, if desired.

Which may be right for you — a Traditional or Roth IRA?

While you can consult with a Retirement Program Specialist and your tax advisor who can help with this decision, here are some things worth considering:

  • Long time until retirement?… A Roth IRA may be most attractive because of the long time your assets potentially grow tax-free and therefore the higher the value to you of tax-free withdrawals.
  • You can't deduct contributions to a Traditional IRA… consider a Roth IRA because your earnings from a non-deductible Traditional IRA will be taxed upon distribution, but not from a Roth IRA.
  • High tax bracket now?… a Traditional IRA may be attractive to consider if you expect to be in a lower bracket when you retire. The added tax deduction you may qualify for now could outweigh the advantages of being able to take distributions tax-free in a Roth IRA.

Be sure to consult with your tax advisor for specific advice pertaining to your options.

1 Withdrawals are taxed as ordinary income and if made prior to age 59 ½ may be subject to a 10% federal tax penalty.

Tax-qualified retirement plans such as IRAs and SEPs already provide tax deferral under the Internal Revenue Code. Tax deferral of an annuity does not provide additional tax benefits. Before purchasing an annuity you should consider whether its features and benefits beyond tax deferral meet your needs and goals. You may also want to consider the relative features, benefits and costs of this annuity contract compared with other investment that you may use to fund your IRA.

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