Individual Retirement Account (IRA)

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Overview

We offer three different types of Individual Retirement Accounts, Roth, Traditional, and Educational. There are different requirements, contribution amounts, and tax advantages for each of these IRAs.

Account Types

Roth IRA (2018)

Who Can Contribute?
Anyone who has income from compensation (or who is filing jointly with a spouse who earns compensation) with the following MAGI (modified adjusted gross income from the federal tax form):

  • Up to $120,000 (single filers).
  • Up to $189,000 (jointly filers).

Reduced contributions allowed for higher incomes (up to $135,000 for single filers, and $199,000 for joint filers).

How Much Can I Contribute?
Total combined contributions to Roth and traditional IRAs up to $5,500/year (Aged Under 50) $6,500 (Aged Over 50) or 100% of compensation, whichever is less.

What are the Tax Advantages?
Most contributions can be withdrawn tax-and penalty-free at any time. After the account has been open five tax years, earnings can be withdrawn tax and penalty free for any of these reasons: age 59½, disability, beneficiary, or a first-time home purchase (lifetime limit for exemption on first-time home purchase is $10,000). Earnings can be withdrawn penalty-free for the same reasons as those for penalty-free withdrawals from traditional IRAs (withdrawal may be subject to tax).

 

Traditional IRA (2018)

Who Can Contribute?
Anyone under age 70½ who has income from compensation (or who is filing jointly with a spouse who earns compensation).

How Much Can I Contribute?
Total combined contributions to Roth and traditional IRAs up to $5,500/year or 100% of compensation, whichever is less.

What are the Tax Advantages?
Earnings grow tax-deferred until withdrawn, and contributions may be tax-deductible.

 

Education IRA (2018)

Who Can Contribute?
Same eligibility requirements as the Roth IRA, except that the contributor’s income does not have to come from compensation.

Contributions not allowed:

  • Once the beneficiary of the Education IRA reached age 18.
  • In any year that a contribution is made to a state tuition program for the same IRA beneficiary.

How Much Can I Contribute?
No more than $500 total each year for all Education IRAs opened on each child’s behalf.

What are the Tax Advantages?
Withdrawals for qualified higher-education expenses are tax-free.