IRA Accounts

Traditional IRA

You can contribute to a traditional IRA if you earn compensation during that year. Earnings in a traditional IRA are not taxed until they are withdrawn. This type of IRA gives you the ability to defer taxes on the earnings, and to withdraw in a year when you may be in a lower tax bracket. 

If you are under age 50, you can contribute up to $7,000 per year. For owners age 50 or older, you may contribute $8,000 per year. Minimum distributions are required at age 73.

You can still contribute to a Traditional IRA even if you participate in an employer-sponsored retirement plan assuming you meet the age and compensation requirements. If neither you nor your spouse is an active participant in a qualified retirement plan, your contribution is deductible regardless of income.

You should contact your Tax Advisor to see how these rules apply to you.

Roth IRA

The Taxpayers Relief Act of 1997 created this new IRA product that allows persons with earned income to save for retirement using non-deductible taxed money. The money in your Roth IRA, including earning, can be withdrawn tax-free. 

You may contribute to a Roth IRA if your income is less than a limit set by Congress and you earn compensation or your spouse earns compensation and you file a joint return. The annual contribution limit for members under age 50 is $7,000 and $8,000 if you are age 50 or older. As long as you continue to earn income, you may contribute to a Roth IRA even if you are over 73. 

Unless exceptions apply, earnings distributed before age 59 ½ are subject to the 10% early distribution tax paid directly to the government. Minimum distributions are not required at age 73. 

You should contact your Tax Advisor to find out which type of IRA is right for you.