Wealth &
Protection Planning

Traditional IRA

Description

A traditional IRA is a tax-deferred account designed specifically for retirement savings.  Anyone under the age of 70 1/2 who has earned income may establish and contribute up to $5,500, or $6,500 if you are 50 years of age or older, for 2017 and 2018. 

Objective
  • To provide individuals with an account into which they may contribute dollars that may be used for retirement. 
  • Traditional IRAs are suited for all investors under age 70 1/2 with earned income who are able to set aside dollars for retirement.  
Product Features
  • Tax Deferral - Contributions grow tax-deferred until removed.
  • Increased Savings - IRAs may reduce dependence on Social Security.  
  • Flexibility - Contributions can be invested to meet personal objectives.  You can choose from a variety of investments including CDs, stocks, bonds, and mutual funds.  
  • Penalty for Early Withdrawal - Distributions taken prior to age 59 1/2 will be subject to a 10 percent penalty; unless the distribution is due to expenses for secondary education, the first $10,000 attributed to the purchase of a first home, systematic withdrawals, expenses exceeding seven and a half percent for medical purposes, death, disability, and health insurance if the individual has been unemployed for 12 consecutive weeks.  
  • Required Minimum Distribution (RMD) - Mandatory distributions are required at age 70 1/2.
  • Possible Tax Deductions - Your contributions may be tax-deductible depending on whether you participate in an employer sponsored retirement plan.  If you are single and not covered by a plan, or if you are married and neither you nor your spouse is covered by a plan, you can deduct your full contribution.  If you or your spouse is covered by a plan through work, deductibility depends on your MAGI (Modified Adjusted Gross Income).  

MAGI Limits for Deductibility

Filing Status

2017

2018

Deduction

Individual

$62,000 or less

$63,000 or less

Full deduction

$62,001 - $71,999

$63,001 - $72,999

Partial deduction

$72,000 or more

$73,000 or more

No deduction

Married Filing Jointly

$99,000 or less

$101,000 or less

Full deduction

$99,001 - $118,999

$101,001 - $120,999

Partial deduction

$119,000 or more

$121,000 or more

No deduction

Married Filing Separately

Less than $10,000

Less than $10,000

Partial deduction

$10,000 or more

$10,000 or more

No deduction

Contact a STRIVE Wealth Advisor for more information about traditional IRAs. 

All tables show information for the 2016 and 2017 tax years. STRIVE Wealth & Protection Planning LLC, its employees and wealth advisors cannot provide tax or legal advice. Please consult your attorney or qualified tax advisor regarding your situation.

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