Individual Retirement Plans

An individual retirement plan that permits tax-deferred savings for workers younger than 70½.

Key features

  • Contributions are allowed regardless of the individual's adjusted gross income.
  • Contributions may be deductible.
  • Tax deductibility of contributions depends on salary level and whether the IRA owner participates in an employer-sponsored retirement plan.
  • Earnings on both deductible and nondeductible contributions accumulate on a tax-deferred basis. Withdrawals made prior to 59½ will be taxed as ordinary income and may be subject to an additional 10% tax.

Who can establish

  • Anyone with earned income before the tax year in which 70½ is attained may contribute.
  • For married couples filing jointly, a nonworking spouse may also fund an IRA contribution based on the earned income of the working spouse (up to the annual limit).

Annual fees

$15 per account1 includes 1099-R and 5498.

 

1$15 per account is drafted automatically unless otherwise instructed. Annual fee is waived for account balances of $50,000 or more.

This information does not constitute tax advice. Please consult your tax advisor about your particular situation.

An individual retirement plan that permits tax-free earnings and distributions.

Key features

  • Contributions are nondeductible, but qualified distributions are tax free.
  • Permits tax-free and penalty-free withdrawals of earnings after five years.1 2
  • Permits tax-free and penalty-free withdrawals of contributions at any time.2
  • Contributions allowed after 70½.

Who can establish

  • Anyone with earned income that does not exceed the annual adjusted gross income (AGI) limits.
  • For married couples filing jointly, a nonworking spouse may also fund an IRA contribution based on the earned income of the working spouse up to the annual limit.

Annual fees

$15 per account3 includes 1099-R and 5498.

 

1After an account has been open for five years, withdrawals of earnings from a Roth IRA are not subject to income tax or the 10% premature withdrawal penalty if the individual is at least 59½, dies, is disabled or uses up to $10,000 of the account's earnings for a first-time home purchase.

2Subsequent withdrawals of assets previously converted from a traditional IRA to a Roth IRA may be subject to a 10% penalty on early distributions if the taxpayer withdraws any portion of the taxable conversion amount before the end of the 5-year period unless an exception applies.

3$15 per account is drafted automatically unless otherwise instructed. Annual fee is waived for account balances of $50,000 or more.

This information does not constitute tax advice. Please consult your tax advisor about your particular situation.

An individual retirement plan for retirement assets rolled over from other eligible retirement plans.

Key features

  • Direct Rollovers: An eligible rollover distribution from an eligible plan that is made payable to the custodian of the accepting Rollover IRA.
  • Indirect Rollovers: An eligible rollover distribution from an eligible plan that is made payable to you and is reinvested in a Rollover IRA within 60 days of receipt. Distributions from one IRA that are reinvested within 60 days to another IRA can only be made once in any one-year period. This rule applies separately to each IRA you own.

Who can establish

Anyone who receives an eligible rollover distribution.

Annual fees

$15 per account1 (includes 1099R and 5498).

 

1$15 per account is drafted automatically unless otherwise instructed. Annual fee is waived for account balances of $50,000 or more.

This information does not constitute tax advice. Please consult your tax advisor about your particular situation.