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Traditional IRA

 
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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 Money withdrawn for other purposes could impact your ability to reach that important goal.

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Not FDIC insured | May lose value | No bank guarantee

You could lose money by investing in the Money Market Funds. Although each of the Money Market Funds seeks to preserve the value of your investment at $1.00 per share, it cannot guarantee it will do so. The Funds’ sponsor has no legal obligation to provide financial support to the Funds, and you should not expect that the sponsor will provide financial support to the Funds at any time.

The Money Market Fund and the Municipal Money Market Fund may impose a fee upon the sale of your shares or may temporarily suspend your ability to sell shares if the Fund’s liquidity falls below required minimums because of market conditions or other factors.

An investment in a Fund is not a deposit of a bank and is not insured or guaranteed by the Federal Deposit Insurance Corporation (“FDIC”), any other government agency, or The Northern Trust Company, its affiliates, subsidiaries or any other bank.

Please carefully read the summary prospectus or prospectus and consider the investment objectives, risks, charges and expenses of Northern Funds before investing. Call 800-595-9111 to obtain a summary prospectus or prospectus. The summary prospectus and prospectus contain this and other information about the Funds.

Shares of the Northern Funds are offered only by a current Prospectus and are intended solely for persons to whom shares of US registered funds may be sold. This site shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of shares of the Northern Funds in any jurisdiction in which such offer, solicitation or sale would be unlawful.

©2017 Northern Funds | Northern Funds are distributed by Northern Funds Distributors, LLC, not affiliated with Northern Trust.