IRA
What is an IRA?
An IRA, or individual retirement account, is an account for your retirement that enables you to delay paying taxes until the money is withdrawn. It’s similar to a 401(k), but instead of the account being managed by your employer, this is an account you choose and manage yourself.
We offer three different types of IRAs: a traditional IRA with tax-deferred growth, a Roth IRA that provides tax-free growth (since you use after-taxed dollars), and a rollover IRA that transforms your retirement account with a former employer (or another IRA) into an IRA you can contribute to continuously.
An IRA can be a wise investment in anyone’s future. The type of IRA (traditional or Roth IRA) you choose should be based on your unique situation.
IRAs can accrue interest based on the money you contribute to them. The more you contribute, the more money you may have in your retirement. The specific details and tax benefits of your IRA depend on if you choose a traditional or Roth IRA.
Everyone should have a strategy for their retirement. If you think you might be in a lower income bracket when you retire, you should consider a traditional IRA because you may be able to make tax-deductible contributions.* If you’re expecting to have a higher income in retirement, consider a Roth IRA and its tax-free growth benefit.
Consider a Rollover for your 401(k), pension, and more
In addition to traditional and Roth IRAs, you might also be eligible to roll over your retirement savings plan from a former employer. Alternatively, you can leave the money with your former employer’s plan, roll it over to a new employer’s plan, or cash out the account.
Are your retirement assets sitting in the right place? Download the pdf to read more about your retirement planning options.
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What are the benefits of an IRA?
- You can accumulate money for retirement
Traditional IRAs grow federal income tax-deferred, while Roth IRAs grow tax-free so the money you invest into your accounts today can lead to more money when you need it in retirement.
- You decide how you contribute
In 2019, you can contribute up to $6,000 per year into your IRA if you are under 50 years old. After age 50, you can contribute up to $7,000 per year, giving you the flexibility to decide how much money you invest each year. Plus, if you choose a traditional IRA your contributions may be tax deductible.
- Tax-free withdrawal in retirement
Depending on the terms of your specific IRA, you may be eligible to withdraw your contributions and earn interest tax-free. With a traditional IRA, some first-time purchases like a home or college expenses can also be withdrawn penalty-free.
Here are the types of IRAs we offer
- Traditional IRA
A traditional IRA lets you defer taxes now and pay them when you withdraw the money for your retirement. If you suspect you’ll be in a lower tax bracket in retirement, a traditional IRA can save you money in the long run, and includes some special penalty-free withdrawals for certain purchases.
- Roth IRA
When you contribute to a Roth IRA you pay taxes on the money you contribute today, but benefit from letting those contributions grow tax-free. If you intend to contribute large sums to your retirement, a Roth IRA may help you save more money in the long run.
- Rollover IRA
A Rollover IRA is an individual retirement account that can be used for funds from a 401(k), 403 (b), 457, or pension plan from a former employer. Alternatively, you can leave the money with your former employer’s plan, roll it over to a new employer’s plan, or cash out the account.
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