Whether you dream of flip-flops or gardening gloves, a Traditional IRA can help you work toward your goals.traditional
The Traditional IRA has been a popular retirement plan since it hit the scene in 1974. That’s when the government signed it into law because it didn’t look like people were going to have enough money to support themselves during retirement.
Traditional IRAs are pretty straightforward – it’s a personal retirement plan that lets you grow money tax-deferred. Even better, if you meet income requirements, your contributions are generally tax deductible, which may mean a lower tax bill.
Even if you make too much money to qualify for the tax deduction, you can probably still contribute to a Traditional IRA. While you won’t get the tax deduction on the contribution, your earnings have the potential to grow tax-deferred.
Now is the time to take control of your future retirement. All it takes is a call to a COUNTRY Financial® representative.
Retirement plans can be complicated, but Traditional IRA rules are pretty straightforward. Here are some of the most significant rules.
You must have qualified earned income to make contributions to a Traditional IRA. You may also receive a tax deduction if your Modified Adjusted Gross Income (MAGI) falls within these limits:
2022 Tax Year (For active participants of a business retirement plan)
The IRS limits how much you can contribute each year to your Traditional IRA. You don’t have to contribute that much, though, and you don’t even have to contribute every year.
2022 Tax Year
When it’s time to withdraw the money, there are a few rules you should know about:
There are a lot of Traditional IRA benefits. The biggest perks are:
You’ll get those benefits no matter where you have your IRA because the IRA itself has the same general rules at every financial institution. It’s simply an account where you put your money.
What sets IRAs apart are the investments you put in them. We think you’ll be impressed with the Traditional IRA options COUNTRY Financial has to offer you.
When it comes to funding your Traditional IRA, it's good to have options. We'll help you select what makes the most sense for you. Some choices we offer:
The Roth IRA can be a tax-smart way to help you prepare for retirement. It’s a personal retirement plan that was created as part of the Taxpayer Relief Act of 1997.
Similar in many ways to its older sibling – the Traditional IRA – the Roth IRA boasts some very tax-friendly features that make it unique in the retirement plan world. Most notably, while you don’t get an income tax deduction when you put money into the Roth – your potential earnings grow tax-free as long as you follow a few simple rules. That’s one of the biggest Roth IRA benefits.
The other big perk has to do with taking distributions. Simply put – you don’t have to take any. While other retirement plans may require you to start taking money out when you’re 72, the Roth IRA doesn’t make you do so, and that may make it a beneficial way to pass money on to your heirs – income tax free.*
While a little more complex than a Traditional IRA, Roth IRA rules are still pretty straightforward. Here are some significant rules you’ll probably want to know about.
Qualifying to make contributions is easy – you have to have earned income, and your Modified Adjusted Gross Income (MAGI) has to fall within these limits.
2022 Tax Year
The IRS has limits on how much you can contribute each year to your IRA. You don’t have to contribute that much, though, and you don’t have to contribute every year.
2022 Tax Year
When it comes to the money in your Roth IRA, think of it as two piles – one with the contributions and the other with any earnings on those contributions.
You can take the contribution money out at any time without penalty or taxes.
To withdraw the earnings penalty- and tax-free, your initial contribution has to be in the Roth for at least five years and you have to be at least age 59 ½. Withdrawing money before age 59 ½ will result in a 10% penalty. There are exceptions, including:
There are a lot of good reasons to open a Roth IRA. The biggest perks are:
But here’s something a lot of people don’t know – Roth IRA rules are generally the same at every financial institution. It’s simply an account where you put your money. The investments you put in them are what the difference is all about, and the Roth IRA options at COUNTRY Financial® set us apart.
No two people are alike, and that’s especially true when it comes to funding your future.
That’s why, at COUNTRY Financial, you won’t be pushed into an investment because it’s all we have to offer. Instead, our funding options are geared for all kinds of investors, so you have a good chance of finding the right one for you. And we're here to help. Some choices we offer:
The odds are you’ll change jobs during your working years.
In fact, the average American worker changes jobs 11 times before retiring.1 If every one of those jobs offered a retirement plan, like a 401(k), that could mean 11 different retirement plans. What could you do with that money? Basically, you have four options with former employer 401(k) money.2 You can:
You'll probably pay a penalty and taxes. The distribution is generally subject to ordinary income tax and a potential IRS early distribution penalty.
If you're happy with the plan and the investment options, this is an easy choice. However, only certain plans allow this.
It’ll be easier to keep track of your retirement money that way. Remember though - if you decide to do this, you may not have the opportunity to roll the money out until you change jobs again. Also, only certain plans allow this.
If you have more than one retirement plan with previous employers, you can probably roll them all to one IRA. This option may make it easier for you to keep track of your retirement money.
There are two events that might make you consider a rollover from an employer retirement plan: changing jobs and retirement.
With a direct rollover, you can open an IRA at a financial institution – like COUNTRY Financial®, tell your former employer you want to roll the money over, and then invest the money. Or if you already have an IRA, you may be able to roll the money into your current retirement plan.
With an indirect rollover, the assets from your former employer retirement plan would go to you (less a percentage they’re required to hold back for federal taxes), and you'd have 60 days to roll over the amount to an eligible retirement plan.
An IRA rollover can help you manage your retirement accounts by allowing you to move money from one tax-favored retirement plan into another.
For example, you can roll the money to a Traditional IRA or a Roth IRA. You'll want to look at your tax situation to see which one would make the most sense for you. Some benefits of an IRA rollover:
Are you investment savvy, have zero interest in the financial markets, or somewhere in between? Wherever you are on the investment scale, COUNTRY Financial probably has a funding option to suit you. Some choices we offer:
Talk to a COUNTRY Financial representative to get more details and review the pros and cons of your options.
COUNTRY Financial® is the marketing name for the COUNTRY Financial family of affiliated companies (collectively, COUNTRY), which include COUNTRY Life Insurance Company®, COUNTRY Mutual Insurance Company®, and their respective subsidiaries, located in Bloomington, Illinois.
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Investment management, retirement, trust and planning services provided by COUNTRY Trust Bank®.
Investing involves risks, including the possible loss of principal.
For product and service information, read our Terms and Conditions.
Annuities issued by COUNTRY Investors Life Assurance Company®, Bloomington, IL. Funding your IRA with an annuity does not offer additional tax benefits.
COUNTRY Financial and our representatives cannot give legal or tax advice. Please consult tax and legal counsel of your choice regarding your personal circumstances.
A mutual fund's investment objectives, risks, charges, and expenses must be considered carefully before investing. The prospectus or summary prospectus contains this and other important information about the investment company and may be obtained by calling 1-866-551-0060. Read it carefully before investing.
Income limitations, contributions and distribution exemptions and limitations are all subject to change.
*Consult with your attorney or an estate planning professional for more information.
1“Smart 401(k) Investing – Moving Your 401(k),” FINRA. [http://www.finra.org/Investors/SmartInvesting/Retirement/Smart401kInvesting/Introduction/]
2Be sure to understand the benefits and limitations of all available options for assets in a former employer retirement plan before making a decision. You should consider factors such as differences in services provided, available investment options, fees and investment related expenses, when penalty free withdrawals are available, when required minimum distributions may apply, protection of assets from creditors and legal judgments, availability of loans and other concerns specific to your situation. You should consult with the plan adminstrator and a professional tax advisor before initiatinig a distribution.