With Social Security and Pensions not being enough income these days, Individual Retirement Accounts (IRA’s) are the answer. Community Regional offer three types of IRA’s
With a traditional IRA, your contributions may be tax-deductible and you can grow your savings tax-deferred until you retire. When you do retire, the contributions you take are taxed based on your current income level.
You must be under age 70 ½ to be eligible for a Traditional IRA.
Non-working spouses can make fully deductible contributions to an IRA, even if their spouse participates in a retirement program, as long as their joint income does not exceed $150,000.
You can contribute up to $5,500 each year or $6,500 if you are age 50 or older.
Before age 59 ½, you may be able to withdraw money without a penalty to purchase a first home (up to $10,000 maximum) or pay qualified costs of higher education.
You can’t make contributions after the age of 70 ½.
The major advantages of a Roth IRA are that you pay taxes on your yearly contributions, but your account earnings and future withdrawals are tax free, plus you can continue to make contributions after age 70 ½ if you are employed.
Penalty free withdrawals after 5 years
Tax free earnings after age 59 ½
Contributions allowed after age 70 ½ when employed
No required distribution at age 70 ½ or in your lifetime
Tax-free if used for first home purchase (up to $10,000) or higher education
Tax-free if disabled or upon death