IRA Traditional / Rollover
Retirement can be a challenge. Not only do you need the day-to-day discipline to stick with your savings strategy, but you have to keep up with IRA rules and regulations. We can help. One common retirement savings tool is a traditional IRA.
Traditional IRA
Traditional IRA's are investment vehicles that are tax-deferred, which simply means you generally won't pay taxes on the money in your IRA until you start withdrawing it. At that time, the money you take out of your IRA will be taxed just like regular income which is typically lower in retirement. On the front side, the money you deposit into your traditional IRA may be deductible from your taxable income.WHAT ARE SOME ADVANTAGES?
Tax-Deductible: Your contribution is yearly deductible on your federal earnings tax return for 12 months.
Tax-Deferred Growth: Your contribution grows tax-deferred until you withdraw the cash and you no longer pay taxes while your money increases.
Anyone Can Contribute: Anyone can contribute, as long as they’ve earned earnings; however, you cannot contribute extra cash to a conventional IRA than what you have received in yearly earned income.
Tax-Sheltered Growth: Whilst the cash sits for your traditional IRA, you shouldn’t pay taxes on any of the profits in your investments.
ROTH IRA
If you suspect your taxes will be higher when you retire a Roth IRA may be a good option for your retirement savings. The money you contribute to a Roth IRA toay has already been taxed, so when you retire and start withdrawing, the money – and any potential growth in the account – may be tax free.
Once you pay for the privilege by paying the tax upfront, all the earnings build income-tax-free. So when you hit retirement age, you won’t have to pay taxes on withdrawals. That can give your savings a powerful boost, especially if your tax rate is higher in retirement.
Traditional IRAs force you to pull out money beginning at age 72. Not so with a Roth.
Unlike most retirement accounts, it’s easy to withdraw your Roth contributions — not your earnings, mind you — without penalty, at any time.
SEP IRA
A SEP IRA (simplified employee pension) is a retirement savings plan established by employers, including self-employed people, for the benefit of their employees and themselves.
WHAT ARE SOME ADVANTAGES?
A SEP IRA allows generous contributions limits. The 2020 SEP IRA contribution limit is $57,000 and the 2019 SEP IRA limit is $56,000.
Contributions into a SEP IRA are generally 100% tax deductible.
Interest earned in a SEP IRA grows tax-deferred.
Contributions into a SEP are completely discretionary. The percentage of contribution can vary year to year or can be stopped depending on profitability.
SEP IRA accounts are inexpensive, easy to setup, do not require annual IRS filings and employer contributions are vested immediately.