A Traditional IRA is a retirement plan for use by people who wish to save for retirement and receive tax deferred earnings and a possible tax deduction in some cases.
To be eligible for an IRA you must have earned income. You may contribute up to 100% of earned income up to $5,000 for individuals under the age of 50 or $6,000 for individuals 50 and older during any tax year. Contributions cannot exceed the maximum to an IRA including the Roth. If you contribute to a Roth IRA, that contribution must be deducted from the Traditional contribution. Traditional IRA contributions may be tax deductible for the individual depending on Modified Adjusted Gross Income (MAGI) and whether or not you are covered by a Qualified Retirement Plan. You may no longer make contributions once you achieve the age of 70 ½.
Distributions are premature and subject to a 10% penalty if you take it prior to reaching the age of 59 ½; however, certain exceptions do apply. These exceptions include: death or disability of the IRA owner; rollover or transfer transactions; Roth conversion; qualified medical expenses or health insurance for unemployed individuals; first-time home purchase expenses; higher education expenses; substantially equal periodic payments; IRS levy or US military reservist distribution. Once the IRA owner reaches the age of 59 ½ through the age of 70 ½, distributions are normal but not mandatory. At age 70 ½ the IRA owner is subject to required minimum distributions.
Please see a new accounts representative for more details.
Please consult your tax advisor for your personal tax implications.