No doubt you've heard that Individual Retirement Accounts (IRAs) are a great 2-for-1 deal. Not only do they help you accelerate your savings, but they offer major tax benefits. But the two most popular IRAs - Traditional and Roth - offer those tax breaks in very different ways. The Wealth Management team can help walk you through the key differences and help you choose an appropriate investment strategy.
Traditional IRA
- Contribute up to $6,000 per year (up to $7,000 if age 50 and over).
- Enjoy possible tax deductions each year a contribution is made.
- Withdraw funds without penalty beginning at age 59-1/2.
- Pay taxes when money is withdrawn from account.
Roth IRA
- Contribute up to $6,000 per year (up to $7,000 if you're age 50 or older).
- No deduction for annual contributions.
- Withdraw funds tax-free, beginning at age 59-1/2.
- Make use of funds for higher education and housing purchases, in some instances.
Rollover IRA
- Move assets from an administered retirement plan, typically from an employer.
- Open or contribute to IRAs when you change jobs or receive a distribution from an employer's retirement plan.
- Take advantage of benefits offered by many Rollover IRAs, including more investment choices and lower fees than a 401(k) or similar account.
- Enjoy tax-free earnings growth, but pay taxes on withdrawals.
- Continue with your current 401(k) provider and existing financial plan, or consider other options including various rollovers.
* Wealth Management products and services are provided through First Bank, and its affiliates and subsidiaries. Neither First Bank nor any of its affiliates or financial advisors provide legal, tax or accounting advice. You should consult your legal and/or tax advisors before making any financial decisions . Investment and insurance products are offered through INFINEX INVESTMENTS, INC., Member FINRA/SIPC. First Bank Wealth Management is a trade name of First Bank. Infinex and First Bank are not affiliated. Infinex does insurance business in California as Infinex Insurance Agency, CA Agency License #0H30186. Products and investment advisory services made available through Infinex are not insured by the FDIC or any other agency of the United States and are not deposits or obligations of nor guaranteed or insured by any bank or bank affiliate. These products are subject to investment risk, including the possible loss of value. Infinex does not offer tax advice. Consult your tax advisor for more details. https://brokercheck.finra.org/