Choosing the Right IRA for your Needs

IRA Types Offered

Traditional IRA

Traditional IRAs allow investments to grow tax deferred, with taxes due when you withdraw at retirement.

Advantages

  • Contributions may be fully or partially deductible
  • Taxes on investment earnings are deferred

Eligibility and Contributions

Persons are eligible for a Traditional IRA if they are a U.S. citizen, receive taxable compensation, and are not age 70 ½ by the end of the year in which the account is opened.

Age determines how much a person can contribute.  Individuals that are 50 and older may contribute more to a Traditional IRA (known as a catch-up contribution).  For additional contribution limits in detail, please visit Contribution Limits or contact Equity Institutional Services at 855-355-ALTS (2587).

Withdrawals

Individuals are eligible to begin making withdrawals at age 59 ½, but minimum withdrawals from a Traditional IRA must begin at age 70 ½.

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Roth IRA

Roth IRAs allow individuals to forgo tax deductions now, but not have to pay taxes on qualified withdrawals.

Advantages:
  • Qualified withdrawals are tax-free
  • Investments are able to compound tax-free
  • No required withdrawals
  • May be able to pass on earnings to beneficiaries tax-free
Eligibility and Contributions

You may have a Roth IRA, regardless of age, assuming his/her Modified Adjusted Gross Income (MAGI) is within allowable limits.  Investors must be U.S. Citizens, and must meet income limits to invest and/or contribute to a Roth IRA.

If an individual meets those limits, they can contribute to a Roth IRA.  Age will determine how much may be contributed annually.  Those individuals that are 50 and older may contribute more (also known as a catch-up contribution).  For more information, please visit  Contribution Limits or contact Equity Institutional Services at 855-355-ALTS (2587).

Withdrawals
  • Withdrawals are not required at any age
  • Contributions can be withdrawn at any age, tax and penalty-free.
  • Earnings in the account may be withdrawn tax and penalty-free as long as it has been open at least 5 years and the owner is over the age of 59 ½.
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Small Business IRAs

SEP – Simplified Employee Pension

Simplified Employee Pensions, or SEPs, are designed for self-employed individuals and small business owners, typically with 25 employees or less. The SEP allows contributions toward retirement without getting involved in a more complex qualified plan such as a 401(k).  Contributions to a SEP are tax-deductible and compound tax deferred until withdrawn.

Why Consider a SEP?

If an individual wants to contribute the highest amounts possible to a retirement account and qualify for the highest tax deductions yearly (other than a retirement plan), then a SEP might be the right option.

SIMPLE – Savings Incentive Match Plan for Employees

The SIMPLE is a plan for small businesses, typically with 100 or fewer employees, that have no other retirement plans.  With a SIMPLE plan, contributions are tax deductible and compound tax deferred until withdrawn.

Why Consider a SIMPLE?

Allowable contributions are more than individual plans and if you have employees other than your family, as the employer you are only responsible to match if the employee contributes funds first.

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For more information please Contact Us.