If you are like me, retirement may appear to be far, far away. Perhaps you are closer to retirement and you are already thinking about what you want to do. I know I envision trips, maybe a new vehicle and hopefully some relaxation! Whether you are close or not, it’s always a good time to begin planning for your retirement with an IRA. In this article, I’m going to give you some basic ideas to get you started thinking about retirement!
There is no minimum age requirement to start an IRA; the only requirement is that you must have earned income. There are several different kinds of IRAs out there, but today we will just cover Traditional and Roth IRAs. One difference between these accounts has to do with taxes. With a traditional IRA, you are required to pay taxes on any distribution, while on the other hand, Roth IRA distributions are not taxable. Traditional IRA contributions may be tax deductible, whereas, Roth IRA contributions are not.
There is also a limit as to how much you can contribute to your IRA each year. For 2015, the most you could contribute to your IRA in one year is $5,500.00 if you are under the age of 50. If you are over the age of 50, your limit is $6,500.00. These limits are subject to change annually. You may take money out of your Traditional IRA at any age, but if you are under the age of 59 ½, you may be subject to an IRS penalty for early distribution. You must begin taking minimum distributions by April 1st the year after you turn 70 ½. For a Roth IRA, there is no age requirement when you have to begin drawing out.
Whether you are picturing kicking back on the beach, touring in Europe, or just enjoying family and friends, it’s the perfect time to start an IRA! To check out our products, just visit our website. We offer brochures for your convenience at our locations for questions regarding IRA’s. You can also stop in and talk to one of the tellers who will assist you. I hope this article has given you something to think about and hopefully answered some questions you have had regarding IRAs. As always, please don’t hesitate to contact any of our friendly branches with questions!
Until next time