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Traditional Approach, Big Tax Deduction.
You may have seen that "IRA deduction" line as you're filling out your tax returns. It's a small line item that can offer big tax savings. Depending on your income and other eligibility requirements, you may be able to deduct $5,000 ($6,000 if you are over 50) from your taxes or $10,000 ($12,000 if both you and your spouse are over 50) if you also contribute fully to an IRA for a spouse. If, in years past you never took advantage of it, there's good news. It's not too late!
Want individual help in choosing the IRA plan that's best for you? Contact our highly-trained IRA Customer Service Representatives for free advice on available plans and choices. They are here to answer your questions seven days a week.
401(k) Funds Gathering Dust?
How do you fund your new tax-fighting Traditional IRA account? Well, your retirement savings might just be sitting there, gathering dust in a 401(k) account at your old employer. It's time to give some serious consideration to taking a proactive approach to your retirement savings by rolling your old 401(k) account balance into a tax saving, wisely invested Individual Retirement Plan (IRA). After all, who's going to have your retirement best interests in mind, your ex-employer or you? With an IRA, you are in control of your funds and your retirement future. And don't forget, you may finally get to take advantage of that sought after IRA deduction on your tax return.
If you are considering rolling your 401(k) into an IRA, generally the wisest choice from a tax standpoint is to arrange for the direct transfer of your retirement funds from your employer's plan to an IRA. With this approach, your plan is not required to withhold any funds for taxes, the funds distributed are not subject to taxation at the time of the transfer, and no early withdrawal penalty will apply. We are experts at the direct rollover process and would be glad to assist you.
Starting From Scratch
Perhaps you haven't yet started the process of investing for your retirement or you want to save outside of your company's retirement plan. The good news is, you can accomplish this on your own and keep your IRA separate from any 401(k) plans that your current or future employers may offer. You can also open an IRA for your spouse if you are married. And regarding that tax deduction mentioned above, don't worry...it's not too late. You have until April 15th of next year to make contributions for this year. (Note: An extension of 180 days exists to this funding deadline if you are in a qualified combat zone or hazardous duty area.)
Conclusion
A Traditional IRA is just one of the IRA options available to you. If you cannot deduct a Traditional IRA contribution or want to keep your money in an IRA past age 70½, you should consider a Roth IRA. A Roth IRA also lets you make qualified distributions tax-free.
If you are self employed, or own a small business, you might consider a SEP or SIMPLE IRA plan. A SEP or SIMPLE IRA plan may allow you to make greater contributions to your retirement account and build your nest-egg at a much faster pace.
Want individual help in choosing the IRA plan that's best for you? Contact our highly-trained IRA Customer Service Representatives for free advice on available plans and choices. They are here to answer your questions seven days a week.
Below is more information regarding a Traditional IRA, including answers to many common questions.
Click here for information on whether or not you can deduct an IRA contribution and information on IRA distribution.
