Untitled Document
Retirement: IRAs
 

Individual Retirement Accounts –IRAs

There are three common types of IRAs.

Traditional IRA
• any earnings grow tax deferred until withdrawn after 59 ½ after which time they are taxed at your current rate
• contribution and earnings can be withdrawn penalty free after 59 ½
• contribution may be tax deductible
• anyone under the age of 70 ½ who has earned income equal to or grater than their IRA contribution amount.
• if you contributed to an employer sponsored plan like a 401(k) or 403(b), you are still available to contribute to an IRA-there are limitations
• if you have no earned income and your spouse earned enough income to cover your contribution as well as their own, you can contribute to a traditional IRA.
• if you are under age 50 you can contribute for 2016 $5500.
• if you are age 50 or older you can make an additional catch-up contribution each year

Roth IRA
• any earnings are tax free if withdrawn after 59 ½ and the account have been opened 5 years or more
• contributions not earnings can be withdrawn tax and penalty free at any time.
• contributions are not tax deductible
• no required minimum distribution at 70 ½
• if you are under 50 years old you can contribute for 2016 $5500
• if you are age 50 or older you can make an additional $1,000 catch-up contribution each year

IRA Rollover
• Allows you to consolidate retirement plans from former employers while maintaining the accounts tax deferred status and expanding your investment choices.
• offers more investment choices.
• provides a more consolidated view that makes it easier to track how your retirement savings and investments are performing.

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