IRAs

An Individual Retirement Account provides you with many advantages, the greatest of which is the tax-deferred compounding of investment earnings on your contributions.

Traditional IRA at a Glance

• Contributions may be deductible
• Tax-deferred growth of earnings
• Maximum annual contribution of $5,500 ($6,500 if age 50 or older), or up to 100% of earned income, whichever is less
• No contributions after age 70 ½
• Minimum distributions required beginning at age 70 ½

Are you eligible?

If you have earned income and are under age 70 ½, you can contribute up to $5,500 (or 100% of your earned income, whichever is less) each year to a Traditional IRA. Individuals 50 years and older can make an additional "catchup" contribution of $1,000.

Are your contributions deductible?
Your IRA deductions may be fully or partially deductible from your current taxable income depending on two factors: your income level and your status as an active participant in an employer-sponsored retirement plan.

How long can you contribute?
You may contribute to a Traditional IRA until the year in which you attain age 70 ½.

What about withdrawals?
You can take withdrawals from your account at any time and pay current federal income tax.* However, withdrawals prior to age 59 ½ may be subject to a 10% early withdrawal penalty, except in certain circumstances which include:

• First-time home purchase expenses, subject to a $10,000 lifetime maximum
• Qualified higher education expenses, such as tuition, room and board, books, supplies, and equipment
• Major medical expenses, exceeding 10% (or 7.5% if you or your spouse was born before January 2, 1949) of your adjusted gross income
• Disability or death of the account owner
• Payment of health insurance premiums, if you've received unemployment compensation for 12 weeks or more
• Distribution of "substantially equal periodic payments" made over your life expectancy

*Withdrawals must begin by April 1 of the year following the year in which you attain age 70 ½. Keep in mind, your account earnings and any deductible contributions will be subject to federal income taxation at your income tax rate in effect at the time of withdrawal.

Remember, IRAs are designed to help you invest for a financially secure retirement. Money withdrawn for other purposes could impact your ability to reach that important goal.

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