IRA support

If you reach the age of 50 before the end of the taxable year, you may be eligible to contribute an additional catch-up contribution to your Traditional and/or Roth IRA. For tax year 2006 and beyond, the annual amount is $1,000.

• You can open and fund one without employer participation
• Contributions/earnings are tax-deferred until retirement ¹
• Depending on your plan participation and income, you may benefit from tax deductions
• Your funds are always available, generally not true of employer plans
• There’s no minimum contribution

The deadline to contribute to a Traditional IRA for a particular tax year is generally April 15 (or tax day) of the following year. When this date occurs on a weekend or a legal holiday, the following business day becomes the deadline.

When you contribute to your IRA between January 1 and April 15 (or Tax Day) for the previous tax year, it’s referred to as a “carryback” or “prior year” contribution.

For tax year ending December 31, 2023, the deadline to contribute a carryback contribution is Tax Day, April 15, 2024.

A SEP is a type of retirement plan that allows an employer to contribute to employees’ Traditional IRAs. SEP contributions are subject to different contribution limits than Traditional IRA contributions. Once the employer makes a SEP plan contribution to an IRA, the contribution becomes an IRA asset and is subject to all the regular IRA rules and regulations. There are several other benefits of SEP plans:

• Total SEP contributions cannot exceed $66,000 for 2023 and $69,000 for 2024
• Contributions made by the employer are always 100 percent vested
• SEP plans may make contributions on behalf of eligible participants at any age starting 2020.
• Because SEP plan contributions become the employee’s IRA assets, these SEP IRA assets may generally be transferred in the same manner as IRA assets resulting from regular IRA contributions

Yes! A non-deductible contribution gets you one step closer to a secure retirement. It grows tax-deferred and is tax-sheltered until you withdraw it.

You should file a 8606 form to track your non-deductible contributions.

You can contribute if you have earned income from employment equal to or greater than your IRA contribution.

For tax year 2024, the contribution limit is $7,000 and, if you are age 50 or above, you could also make an additional $1,000 catch-up contribution for a combined total of $8,000 annually.

Unlike most employer retirement plans in which access to funds is limited to such events as change of employment, plan termination, reaching retirement age, death, or disability, access to your IRA funds is guaranteed, always. However, until age 59 1/2 there is a 10 percent early distribution penalty and you may be taxed on the amount withdrawn unless you qualify for an exemption due to one of the following reasons:

• Disability
• Qualifying medical expenses
• Qualifying education expenses
• Unemployment (under certain conditions)
• Qualifying first home purchase
• Death
• Receipt of your IRA assets in equal payments over your life expectancy
• Distribution on account of an IRS Levy
• Qualified HSA funding distribution
• A qualified military reservist called to active duty for at least 180 days (applies to individuals ordered or called to active duty after 9/11/01 and before 12/31/07)

You can move your IRA from one financial organization to another provided that your IRA assets are:

• Withdrawn (distributed) and redeposited elsewhere (known as a rollover) within 60 days
• Moved to another organization (known as a trustee-to-trustee transfer)

Note: The IRS permits one rollover deposit in a 12-month period for all IRA accounts. This limitation doesn’t apply to Roth conversions or institution transfers

Starting January 1, 2023, the Required Beginning age to take a Required Minimum Distribution (RMD) increased to 73 years old for IRA owners who will turn 73 in 2023. RMDs are generally based on your IRA balance divided by your life expectancy, either singly or jointly with your IRA beneficiary. IRAs are meant to provide for retirement, so if you don’t take your required distributions, you’ll be subject to a substantial penalty.

Contributions made by an employer through a retirement plan known as a simplified employee pension (SEP) are actually contributed to a Traditional IRA, and they can be combined with regular IRA contributions. Effective in 2002, after-tax assets from a “qualified retirement plan” and assets held in governmental 457 plans are eligible for rollover to a Traditional IRA. To protect the option of someday moving them to another employer plan, such assets are often best kept in a separate IRA that contains no other contributions.