Series 7 IRA & ERISA

Employee Retirement Income Security Act (ERISA)

Provides for minimum standards for established private sector retirement plans: disclosure, standards, accountability, remedies, guarantees. It does not compel an employer to have a retirement plan or to provide minimum benefits in a plan.

Roth IRAs - Qualified Distributions

There are no tax consequences on the distribution.

Roth IRAs

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

Traditional IRA - Distributions

may begin at age 59.5 and are mandatory by 70.5.

Rollovers

Distributions from one retirement plan to another retirement plan or account.

Rollover from an Roth plan to a Qualified Plan

It is NOT permissible to rollover from a Roth plan to a Qualified plan.

Traditional IRAs - Individuals who ARE active in a retirement plan at work maybe able to deduct contributions to an IRA depending upon income limitations and adjusted gross income.

The Simplified Employee Pension Plan (SEP)

Plan used by small businesses to provide retirement benefits for themselves and their employees used due to low administrative costs. Employer makes tax-deductible contributions into IRA and employees make their own additional contributions.

Roth IRAs - Contribution Conditions

1. Contributions may be made annually up to specific limits. 2. Individuals who are at least 50 years of age may contribute an additional "Catch up". 3. Contributions are NOT tax deductible (After-tax dollars are used). 4. Contributions may continue after age 70.5.

Traditional IRAs - Contribution Conditions

1. Contributions may be made annually up to specified limits. 2. Individuals who are at least 50 years of age may contribute an additional "Catch Up" 3. Contributions may not be made after age 70.5.

Is it permissible to rollover from a Qualified Plan to a Roth plan?

Yes, but the rollover would be subject to income taxes.

Roth IRAs - Non-qualified Distributions

A portion of the distribution may be included in the account owner's gross income and will generally be subject to a 10% early withdrawal penalty.

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

Traditional IRA

Account designed to encourage employed individuals to save for retirement by providing them with tax incentives. Tax incentives include a deduction for contributions for individuals whose income does not exceed maximum amounts and tax deferral of growth within the account. Distributions after retirement are taxed as ordinary income.