Series 66 IRA

Traditional IRA

Traditional IRA

An individiual retirement account designed to encourage employed individuals to save for retirement by providing them with tax incentives. The incentives are that the contributions to the account are generally tax-deductible (up to certain limits) and that the taxes on contributions and earnings in the account are deferred.

Traditional IRAs

Individuals who ARE active in a retirement plan at work may be able to deduct a contribution to the IRA, depending upon income limitations on Adjusted Gross Income.

Traditional IRAs - Contribution Conditions (3 key facts)

1. Contributions may be made annually up to plan limits

2. Individuals who are at least 50 years old may make additional contributions called "Catch-Up Contributions"

3. Contributions may not be made after age 70 1/2

Traditional IRAs - Deductions

Individuals who are NOT active in a retirement plan at work may deduct ALL of their contributions up to the annual contribution limitations.

Traditional IRA Distributions

may begin at age 59 1/2 and are mandatory by 70 1/2.

Roth IRA

Roth IRAs

A way for individuals to save for retirement. Contribution's to a Roth IRA are NOT tax-deductible from the owner's gross income but the incentive to invest is that the withdrawals of contributions and qualified earnings are tax-free if certain conditions are met.

Roth IRA Contributions Conditions

1. Contributions may be made annually pursuant to limitations on annual contributions and limitations on income, 2. Individuals who are at least 50 years old may make additional contributions called "Catch-up Contributions", 3. Contributions are NOT tax deductible (After-tax dollars are used), 4. Contributions may continue to be made after age 70.5.

Roth IRAs - Qualified Distributions

Distributions withdrawn from the Roth IRA account which meet specific Roth IRA requirements and are tax-free.

Roth IRAs – Non-Qualified Distribution

A portion of a Roth IRA distribution that will be included in the account owner's gross income. Generally such a distribution will be subject to a 10% early withdrawal penalty.