|
|
 |
|
|
|
Home > Account
Types > Individual Accounts |
|
|
|
|
|
 |
|
|
| |
 |
|
An Individual Retirement Account (IRA) is a personal retirement
savings plan available to anyone who receives taxable
compensation during the year. Some of the most popular IRA
accounts include the following:
|
|
Traditional IRA
A Traditional IRA is an excellent supplement to an individual’s
retirement income. Making contributions is flexible, so
individuals can choose when they want to fund the Traditional
IRA. Also, contributions to a Traditional IRA may be tax
deductible, and the earnings grow on a tax-deferred basis.
Assets in the Traditional IRA are not taxed until they are
withdrawn. This means that the owner can defer paying taxes
until retirement, when he or she is most likely in a lower tax
bracket. On an amount received during retirement, the owner of
the Traditional IRA may pay less tax than on an amount received
during pre-retirement years. Withdrawals made prior
to age
59-1/2 may be subject to a 10% IRS penalty tax.
Learn more about Traditional IRA:
Traditional IRA Details (Adobe Acrobat File, size:174KB)
ROTH IRA
Like the Traditional IRA, a Roth IRA is an excellent supplement
to an individual’s retirement income, but unlike the Traditional
IRA, for which earnings accrue on a tax-deferred basis, the Roth
IRA accrues on a tax-free basis. For Roth IRAs, qualified
distributions are tax-free and contributions are never tax
deductible. Similar to the contributions to the Traditional IRA,
making contributions to the Roth IRA are flexible, so
individuals can choose when they want to fund the Roth IRA.
Learn how a Roth IRAs works, how to set one up, and even how to withdraw from it:
Roth IRA Details (Adobe Acrobat File, size:212KB)
SEP IRA
A SEP is a retirement plan established by employers, including
self-employed individuals (sole proprietorships or
partnerships). The SEP is an IRA-based plan to which employees
may make tax-deductible contributions on behalf of eligible
employees. The employer is allowed a tax deduction for plan
contributions, which are made to each eligible employees’ SEP
IRA on a discretionary basis. Employees do not pay taxes on SEP
contributions, but these contributions are taxed when the
employee receives a distribution from the SEP IRA. Withdraws made prior to age 59 ½ are subject to 10% IRS penalty tax.
Learn about SEP IRA eligibility requirements, contributions and distributions:
SEP IRA (Adobe Acrobat File, size:158KB)
SIMPLE IRA
A SIMPLE IRA is a retirement plan established by employers,
including self-employed individuals, that allows eligible
employees to set aside part of their pre-tax compensation as a
contribution to the plan and defer the tax on the money until it
is distributed to them. This contribution is called an elective
deferral or salary reduction contribution.
Employers are required to make either matching contributions,
which are based only on elective deferral contributions made by
employees, or non-elective contributions, which are paid to each
eligible employee regardless of whether or not the employee made
salary reduction contributions to the plan.
Like other employer plans, the SIMPLE IRA allows employers a
tax-deduction for contributions they make to the SIMPLE IRA
plan.
The employee’s contributions to the SIMPLE IRA are not taxed,
but distributions from the SIMPLE IRA are. Withdraws made prior to age 59 ½ are subject to 10% IRS penalty tax.
Learn more about SIMPLE IRAs:
SIMPLE IRA Details (Adobe Acrobat File, size:188KB)
|
| |
|
|
|
|
| |
 |
|
Advisory Services, Asset Management and Securities Offered Through LPL Financial, member FINRA/SIPC
|
|
|
|
|
|
|
|
