A wide array of Individual Retirement Account (IRA) options are available depending on what type of IRA fits your needs.

Traditional IRA
A traditional IRA allows most working individuals to make tax-deductible contributions on a yearly basis. Working individuals can contribute until the year they reach age 70½. These funds then grow on a tax-deferred basis until they are withdrawn.  Accountholders are required to begin taking distributions from the traditional IRA the year they reach age 70½ and each year after.

Roth IRA
This type of IRA provides can provide a flexible alternative. Contributions to a Roth IRA are not tax-deductible. However, funds may grow on a tax-free basis and qualified distributions will be made on a tax-free basis. Unlike a traditional IRA, most individuals with earned income may continue to make contributions to a Roth IRA after age 70½. In addition, accountholders are not required to take distributions unless they are the beneficiaries of the Roth IRA.

Current IRS rules governing contributions to either type of IRA generally allow working individuals to make a maximum $3,000 ($3,500 if 50 and older) contribution during the tax year. Under existing tax laws, contribution limits will gradually be increased through the next few years.

This information is not intended to provide tax advice, and due to the complexity of tax laws governing IRAs individuals are strongly encouraged to seek tax advice from their tax professional.

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