Jump Start Your Future with IRAs
Looking for a simple and easy way to save for your retirement?
An Individual Retirement Account or Annuity (IRA), may be the right solution for you. Like employer-sponsored retirement savings accounts such as 401(k)s, the money you save in an IRA grows tax-deferred* and becomes available to you without federal tax penalties when you turn 59½. However, any amount you withdraw at that time may be subject to ordinary income tax.
To keep your IRA working for you, you could directly roll over some of the proceeds, potentially preserving the tax deferral, into an income annuity, which could help you meet your retirement goals by creating a stream of income you can't outlive. You could also invest some of the proceeds in savings or investment products.
Before you take any action, talk to us. We're here to guide you and help you figure out what's best for your situation.
Grage Financial Group offers many IRA strategies and products that can be used to fund your IRA. Here is an overview:
Traditional IRAs :
A traditional IRA allows your retirement savings to grow tax deferred, meaning you won't pay any taxes on earnings until you withdraw your money. Anyone under age 70 ½ with earned income may contribute up to the allowable limit annually (or 100% of earned income, whichever is less) to a traditional IRA. The allowable limit for 2007 $4,000 and $5,000 for 2008.
For many investors, those contributions may also be tax deductible depending on the amount of the investor's income.
If a married couple files a joint tax return, each spouse may contribute up to the annual allowable limit.
Roth IRAs :
If your traditional IRA contributions are not tax deductible, you might consider contributing to a Roth IRA instead. You can never deduct contributions to a Roth IRA.
The Roth IRA was introduced in 1998, and, since then, many investors have opened Roth IRAs or converted traditional IRAs to Roth IRAs. With a Roth IRA, your assets can grow tax-free, meaning you'll never have to pay federal income taxes on your earnings, provided certain requirements are met prior to receiving the distribution. Depending on your situation, tax free growth could possibly result in a larger retirement nest egg than a comparable investment in a traditional IRA.
Rolling Over Your 401(k) or Other Retirement Savings
If you plan to retire or change jobs in the near future, you may face a number of difficult decisions. Among the most important is, what to do with the money you've saved through your employer's retirement plan and how this decision will impact your retirement planning. As you prepare to make this decision, your next steps should include understanding the distribution options available to you, their tax implications, and how each could impact your savings and goals, both today and in the future.
By taking control of your retirement savings and rolling your 401(k) into a IRA you may:
- Increase your investment options
- Take control of your overall retirement plan
- Move your money out of your former employer's retirement plan (401(k) and 403(b)) without tax consequences or other penalties
- Keep your savings invested tax-deferred
- Provide better estate planning benefits than your current retirement savings plan
