IRA Information

Individual IRA Options

1. Traditional IRA
   • Contribution Limits- Contributions can be made as long as you have compensation(the wage you receive as an employee). Contributions may be tax deductible, depending on eligibility for the year the contribution is made. Maximum contribution limits can change each year, please consult your tax adviser for more information.
   • Withdrawal Penalties- If you withdraw from your Traditional IRA before age 59 ½, you may incur an early withdrawal penalty from the IRS.
   • Required Minimum Distributions (RMD) - The year you turn age 72, and each year thereafter, you will be required to take out annual distributions, and the distribution amount will change depending on age and amount of the IRA.
   • Taxes- Interest earned from the IRA is tax-deferred, meaning you will not pay taxes on your interest, until you withdraw from it. Any contributions that were tax-deductible will also be taxed when withdrawn.
2. Roth IRA
   • Contribution Limits- Contributions can be made as long as you have compensation and your modified adjusted gross income (MAGI) for the tax year does not exceed the MAGI limit.  Please consult your tax adviser for more information.
   • Withdrawal Penalties- If you withdraw from your Roth IRA before age 59 ½, you may incur an early withdrawal penalty from the IRS.  
   • Required Minimum Distributions (RMD) - Roth IRA’s do not require a minimum distribution
   • Taxes- Contributions are not tax-deductible; therefore, distributions are not taxed.
3. Coverdell Education Savings
   • Coverdell’s are designed to help with the cost of education, so they can only be used to pay for qualified expenses (tuition and fees, books, supplies)
   • Accounts can be opened for any student under the age of 18. The assets must be withdrawn by the time the student is 30.

Business Retirement Options

1. SEP (Simplified Employee Pension)
   • Commonly used for self-employed persons or businesses with few employees, all employees must receive the same benefits under a SEP plan. SEP’s are funded by the employer only and contributions may be tax-deductible.
   • Contributions- Please consult your tax advisor for more information.
   • Withdrawal Penalties- If the employee withdraws before age 59 ½, they may incur an early withdrawal penalty from the IRS
2. SIMPLE (Savings Incentive Match Plan for Employees)
   • SIMPLE plans are for businesses with less than 100 employees. Employees are not required to contribute.
   • Contributions- Please consult your tax advisor for more information.
   • Withdrawal Penalties- If the employee withdraws before age 59 ½, they may incur an early withdrawal penalty from the IRS.