Personal IRAs
Traditional IRA - As the first type of IRA created
for individuals, the Traditional IRA allows annual tax-deductible
contributions that depend on the individual's Modified Adjusted
Gross Income and the individual's participation in an employer's
retirement plan. Withdrawals are taxed; however, earnings on
principal and interest accumulate tax-deferred until funds are
withdrawn from the account penalty-free after age 59½. Minimum
required distributions are mandatory after age 70½.
Among other considerations, a Traditional IRA may be appropriate for
individuals who anticipate tax rates during retirement will be lower
than their current rate, or whose tax strategy is to defer taxes
until after retirement.
Roth IRA - This is an alternative to a Traditional
IRA with distinct tax benefits. Contributions, for example, are not
tax-deductible, but can be made past age 70½. Earnings from a Roth IRA accumulate
tax-free, but unlike a Traditional IRA, withdrawals are free of tax
and penalties, provided certain conditions are met. Those conditions
include a five-year holding period and attainment of age 59½, or if
made for certain specific purposes.
Among other considerations, a Roth IRA may be appropriate for those
who expect tax rates during retirement to remain the same or to be
higher than their current tax rate.
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Personal IRAs
> Employer Sponsored IRA
> Contributions
> Tax Deductibility
of Contributions
> IRA Transfers
> IRA Rollovers
> Distributions from
Your IRA
> Prohibited
Transactions
> Unrelated Business Taxable
Income (UBTI)
> Alternative
Investments
> Traditional
Investments
> Cash Investment Program
> FAQs
> Fact Sheets
> Glossary of Terms
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