Investments

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Traditional Individual Retirement Account (IRA)

Who can contribute to an IRA? Anyone under age 70 1/2 who has income from compensation (or who is filing jointly with a spouse who earns compensation).  Anyone who has received a distribution from a qualified retirement plan and decides to move (roll-over) the proceeds of the plan into an IRA.

How much can I contribute?

You may be able to contribute up to $5,000. For owners age 50 and older, you may be able to contribute up to $6,000. Contributions cannot exceed compensations.

Contribution Guidelines

Single individuals not active in employer retirement plans. Single individuals active in qualified retirement plans with Modified Adjusted Gross Income (MAGI) below defined limits. Married couples with neither spouse active in an employer retirement plan. Married individuals active in qualified retirement plans filing joint tax returns with MAGI below defined limits. Married individuals active in qualified retirement plans filing joint tax returns with spouses who are, as long as MAGI is below defined limits.

What are the tax advantages?

Earnings grow tax-deferred until withdrawn and contributions may be tax-deductible.

When can I withdraw without restrictions?

Withdraw penalty-free for any of the following reasons: Qualified higher-education expenses, first-time home purchase**, qualifying medical expense exceeding 7.5% of adjusted gross income, payment to beneficiaries upon the owner’s death, payment of health insurance premiums while unemployed for 12 weeks or longer, age 59 ½, or disability.

*Modified Adjusted Gross Income (MAGI) contribution and deductibility limits change frequently. Consult your tax professional regarding your individual circumstances.

**Consult a tax professional regarding first-time home purchase guidelines.

Roth IRA

Who can contribute to a ROTH IRA? You are eligible if you earn compensation and your MAGI* is less than the defined limits set by congress. If your modified adjusted gross income (MAGI*) is too high to contribute the annual contribution limit, you may be able to make a smaller contribution.

How much can I contribute?

You may be able to contribute up to $5,500. For owners age 50 and older, you may be able to contribute up to $6,500. or 100% of employment compensation, whichever is less.

Contribution Guidelines

Most everyone is able to contribute to a ROTH IRA. Contributions must be from earned income and may not be from investment income.

What are the tax advantages?

If the IRA account is open for 5 tax years; qualified distributions (age 59 1/2 or more, disability, death, or a first-time home purchase**) may be withdrawn tax-free.

When can I withdraw without restrictions?

Regular contributions can be withdrawn tax-free and penalty-free at any time. After the account has been open 5 tax years, earnings can be withdrawn tax-free and penalty-free for any qualified distribution (age 59 1/2 or more, disability, death, or a first-time home purchase**).

*Modified Adjusted Gross Income (MAGI) contribution and deductibility limits change frequently. Consult your tax professional regarding your individual circumstances.

**Consult a tax professional regarding first-time home purchase guidelines.

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