The Retirement Plan for Everyone
Today more than ever before, one of the greatest challenges facing American workers is ensuring their financial security in retirement. With uncertainty over the adequacy of Social Security to meet the needs of future retirees, Americans forced to rely more heavily on their own resources to support their retirement lifestyle.
At the same time, the world of employer based pensions is also changing. Each year, there are fewer and fewer employer-sponsored defined benefit plans--the kind of plan that assures employees that they will receive a dependable income throughout their retirement years. Today, employees must make an affirmative decision to put money aside for their retirement. And even when an employer retirement plan is available, employees may be required to make most or all of the contributions.
How can I begin to save for retirement?
Individual retirement arrangements (IRAs) are one of the most viable tools to ensure a secure retirement.
Traditional IRAs offer
What are the basic contribution restrictions?
The requirements for contributing to a Traditional IRA are few.
You can contribute if
You can contribute each year up to
If eligible, your spouse may be able to contribute the amounts listed above to his or her traditional IRA as well.
Are all traditional IRA contributions tax-deductible?
One of the immediate benefits of contributing to a Traditional IRA is the potential income tax deduction. Traditional IRA contributors receive a deduction if
For those who are participants in an employer sponsored retirement plan, Traditional IRA deductibility is gradually phased out above these income levels. Contributions can still be made on a nondeductible basis.
Should I contribute if I can’t take a deduction?
Yes! There are significant benefits to making Traditional IRA contributions, even if they are not tax-deductible.
A nondeductible contribution
Can Traditional IRA assets be moved?
Traditional IRA holders can take comfort in the fact that their Traditional IRA assets are always available to them, and can be moved to certain IRA’s or retirement plans.
Traditional IRA assets may be
Can other assets be combined in a Traditional IRA?
Contributions made by an employer under a simplified employee pension (SEP) plan are actually contributed to a Traditional IRA, and can be combined with other Traditional IRA contributions. Assets from a qualified retirement plan, 403(b) plan, governmental 457(b) plan, or savings incentive match plan for employees of small employers (SIMPLE) plan can also be moved to a Traditional IRA.
When can I use my Traditional IRA assets?
Unlike ,most employer-sponsored retirement plans (in which access is limited to events such as a change of employment, plan termination, reaching retirement age, death, or disability), access to Traditional IRA assets is always guaranteed. If withdrawn before reaching age 59 ½, however, a 10 percent early distribution penalty applies unless you qualify for one of the following exemptions.
Am I ever required to distribute assets from my Traditional IRA?
Traditional IRA holders who turn age 70 ½ must begin to take annual distributions from their Traditional IRAs. These distributions are generally based on the Traditional IRA account balance divided by an applicable distribution period. Because the purpose of Traditional IRAs is to provide for retirement-not to be a tax shelter-IRA holders who fail to take their required distributions are subject to a hefty IRA tax penalty.
|[ Home | What's New | Rates | Personal Banking | Business Banking | Mortgage Banking | Insurance | Online Services | About Us | Contact Us ]|
Browser Requirements | Copyright © Harland Financial Solutions, Inc. All Rights Reserved.