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Individual Retirement Plans (IRAs)-Deposit Based

Plan Type
Advantages
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Know Your IRAs

Plan Type Advantages Compare
Traditional IRA

With a traditional IRA, money deposited into the account may be tax-deductible and is not subject to income tax until you withdraw funds. This ability to delay when taxes are paid can be an advantage to some investors.

Roth IRA

In a roth IRA, the contributions you make have already been taxed and are not tax-deductible. Since you’ve already paid taxes on these funds, you are not subject to income tax at withdrawal. You can even take certain early distributions without paying an early withdrawal penalty. If you have had your Roth IRA for more than 5 years and are at least 59 ½ years old, distributions from the account are tax-free and penalty free. This means that the earnings your Roth IRA generates are considered tax-free.

Rollover IRA

If you have a 401(k) or an employer-provided qualified retirement plan from a previous employer, one of your options is to roll over the funds into an IRA. This rollover IRA prevents you from having to pay taxes or withdrawal penalties at the time funds are transferred and could help you defer income taxes for years. You may also have more investment choices available to you than were offered in your employer-provided retirement plan.

Inherited IRA

An IRA can offer advantages as a way to pass along money to your family or other beneficiaries. IRS regulations allow the ability to extend IRA benefits over time, with an election of annual payments for the life of the recipient or for a fixed number of years. There is also the option of a lump sum payment, and spouses can rollover an inherited IRA into their own IRA. We’re happy to discuss your options if you are inheriting an IRA or your estate plan includes IRA assets. If you’re inheriting an IRA, or planning to leave one behind, we’re glad to discuss your options with you.

SEP IRA

A simplified employee pension plan (SEP) is an easy way for employers to contribute directly to an employee’s retirement savings . Only employers can make contributions to a SEP, by depositing funds into a type of traditional IRA called a SEP IRA. A major advantage of a SEP IRA is the higher contribution limit per year – up to 25% of an employee’s pay can be contributed. If you’re self-employed, you can benefit from setting up a SEP IRA to save for your own retirement.

 

Term or No Term?

Being able to choose the term length helps you plan for your retirement with specific milestones in mind. But, while a Term IRA lets your savings grow during a term of your choice, a No Term IRA gives you the flexibility to take advantage of all an IRA has to offer, without any specific term length.

Term

  • Works with a traditional or roth IRA
  • Pick your desired term length
  • Fixed or variable rate options
  • Automatic and additional deposits allowed
  • Contributions may be tax deductible dependent on account type (consult your trusted tax advisor for details)
  • Interest paid on the balance and credited to your IRA account

No Term

  • Works with a traditional or roth IRA
  • Pick your desired term length
  • No set term length
  • Automatic and additional deposits allowed
  • Contributions may be tax deductible dependent on account type (consult your trusted tax advisor for details)
  • Interest paid on the balance and credited to your IRA account