Traditional Individual Retirement Accounts (IRAs) are designed to allow individuals to save for their retirement while giving them a tax break now for setting aside earnings. The idea is to give people the opportunity to relieve some tax liability during their working years and defer it until retirement, when they are generally in a lower tax bracket. Contributions are generally tax-deductible depending on your income levels and tax filing status.
Am I eligible for a Traditional IRA?
To be eligible to contribute to a Traditional IRA, you’ll need to be under the age of 70½ for the entire tax year and you (or your spouse) must have earned income.
Contributions to a Traditional IRA may be partially or fully tax deductible depending on your income level and whether you are an active participant in an employer-sponsored retirement plan. The ability to deduct your contributions may change each year depending on your personal situation and may require some additional forms when filing your taxes. You’ll need to consult your tax professional for specific recommendations based on your individual tax needs.*
How much can I contribute?
Contributions can be made to a Traditional IRA of up to 100 percent of your earned income or the annual contribution limit, whichever is less. The IRS reviews the contribution limits annually and adjusts if necessary to keep in line with inflation and the cost of living. +cannot exceed 100% of earned income
The deadline for regular and catch-up IRA contributions is your federal income tax filing due date, excluding extensions (usually April 15th).
IRA Withdrawals
Although you may begin making withdrawals from your Traditional IRA without penalty at the age of 59½, you will be required to make annual withdrawals starting in the year you turn 70½. In the event of your death, your named beneficiaries will be notified and receive the rights to the balance of your Traditional IRA. Distributions to your beneficiaries are penalty free and there are options for them on how the funds can be disbursed.
To learn more about the features and benefits of a Traditional IRA stop by any of our branches during normal business hours or call our Member Service Center at (800) 877-8328.
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IRA Info Center
*Information provided is intended to provide general information on federal tax laws governing Traditional IRAs. It is not intended to provide legal advice or to be a detailed explanation of the rules or how such rules may apply to your individual circumstances. For specific information, you are encouraged to consult your tax or legal professional.