Individual Retirement Accounts (IRAs) are possibly the most common tax-deferred retirement savings plans available today. Using the tax-deferred benefits of an IRA it is possible to grow your account from interest, capital gains, and dividends before taxes chisel away at the account. This allows compound interest to really work for you along your journey towards reaching your retirement goals. Using a tax-deferred IRA today may also reduce your current income tax liability. Our expert advisors can show you strategies using an IRA that may provide current and future benefits.
401(k), 403(b), and 457(b) plans from former employers can be moved into IRA accounts. This removes the employer’s rules governing those accounts which gives you more freedom. Many employers require you to move your employer sponsored retirement accounts once your leave employment.
Roth IRAs are one of the most popular after tax investment accounts on the market today. A Roth IRA allows your account to grow tax-free. This means that any interest, capital gains, and dividends earned throughout your career will not incur a tax liability upon distribution. This can drastically reduce future tax liabilities.
One restriction of IRA accounts is the contribution limits that the I.R.S. sets. Prior to the age of 55 maximum contribution limits are $5,500 per year. After age 55 catch-up contributions of an additional $1,000 per year are allowed. One drawback of IRAs is the lack of access to your money prior to the age of 59 1/2. Any withdrawals from your IRA will cost a penalty of 10%. Taxes will also have to be paid. There are also limits on how long you can keep your money in your IRA. The I.R.S. requires distributions to begin the year after you turn 70 1/2.
Schedule a free consultation today with one of our experienced advisors to discuss how an IRA may help you reach your retirement dreams. Ask about the Guaranteed Lifetime Income option available on some IRAs.