IRA Basics and Benefits
An alternative to insurance products, like annuities, are Individual Retirement Accounts (IRA). These accounts allow the individual investor, instead of fund managers, to decide what stocks, bonds, mutual funds or other investments to place their funds into for retirement savings. Another advantage is that you can grow your money without paying taxes on the earnings (known as “Tax Deferred”). You can only contribute a certain amount each year, but that limit is increased after your reach the age of 50. The goal is to save this money until you reach retirement age (at least 59 ½), and then start taking distributions in a tax beneficial way. For individuals, there are two main types of IRAs: Traditional and Roth.


– All contributions can be deducted on your yearly taxes.
– Distributions are taxed at your income level
– Additional tax penalties can be added if taken before retirement age.
– Exceptions to the tax penalty can be for disability, purchasing a first home (up to a certain amount) or a beneficiary distribution.
– Required Minimum Distributions (RMD) are required after you reach the age of 70 ½.


– Deposit funds after taxes so that you can take your normal distributions tax free.
– Take distributions on non-interest money anytime you want after the first 5 years invested.
– Your income level must be below the the limits set by the IRS in order to continue to invest in a Roth
– Required Minimum Distributions (RMD) are not required


– Follows the rules of the Traditional
– Retirement savings that came from previous jobs like, 401k, 403b or other employer retirement programs can be consolidated into this type of account without tax penalty.

Which One is Right For Me?

There are many factors to consider when deciding if an IRA is right for you. Your insurance agent can discuss this with you in more details.