Traditional IRA

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 $5,000, ($6,000 if age 50 or older) annually to an IRA.

Plan features

Contributions may or may not be income tax deductible.
All earnings are tax deferred until withdrawn.
IRAs decrease reliance on Social Security and pension programs as retirement income sources.
There are expectations to enhance and strengthen IRA opportunities in future years.

Eligibility

Must be less than 70 1/2 on the last day of the year in which the contribution is taken.
Must earn income for services rendered as an employee or as self-employed.

Contribution limits

The lesser of 100% of income or $5,000.
If age 50 or older, individuals may contribute an additional $1,000 as a catch-up provision.

Deadlines

Individuals may contribute to an IRA up until April 15.
Distributions must start by April 1 the year after the individual reaches 70 1/2.

Federal taxation of distributions

Made after 59 1/2.
Made after the owners death.
Due to complete and permanent disability.
Part of a series of similar equal payments in a manner approved by the IRS.
For particular medical expenses.
For particular health insurance premiums.
For payment of higher education expenses.
For purchase of first-time home buyer expenses approved by IRS.

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Neither Woodbury Financial Services, Inc., nor its registered representatives or employees, provide tax or legal advice. As with all matters of a tax or legal nature, you should consult with your tax or legal counsel for advice.

Investment Types

For Individuals:

Traditional IRA

For Businesses:

SEP IRA

SIMPLE IRA