INDIVIDUAL RETIREMENT ACCOUNT (IRA)
Traditional IRA, contributions are not limited by how much you make annually, meaning that anyone with an earned income is eligible to participate, but your contribution may not be fully deductible. There are Traditional IRA contribution limits to how much you can put in. The maximum total annual contribution for all your IRAs (Traditional and Roth) combined is:
- $6,000 (for 2019) and $6,000 (for 2020) if you're under age 50
- $7,000 (for 2019) and $7,000 (for 2020) if you're age 50 or older
The deadline to make a Traditional IRA contribution for the current tax year is typically April 15 of the following tax year.
What is a Roth IRA?
A Roth IRA is an Individual Retirement Account to which you contribute after-tax dollars.
A Roth IRA is an Individual Retirement Account to which you contribute after-tax dollars. While there are no current-year tax benefits, your contributions and earnings can grow tax-free, and you can withdraw them tax- and penalty-free after age 59½ and once the account has been open for five years. Other advantages of having a Roth IRA include:
- No contribution age restrictions. You can contribute at any age as long as you have a qualifying earned income.
- No Required Minimum Distributions (RMDs). There are no mandatory withdrawals, allowing your savings to continue to grow even during retirement.
- No income taxes for inherited Roth IRAs. If you pass your Roth IRA onto your heirs, their withdrawals will also be income tax-free.
A Roth IRA can be a good savings option for those who expect to be in a higher tax bracket in the future, making tax-free withdrawals even more advantageous. However, there are income limitations to open a Roth IRA, so not everyone will be eligible for this type of retirement account.
Open a Roth IRA and take advantage of after-tax benefits as you save for retirement.
One way to take control of your retirement savings is to roll over your plan from a former employer.
What is a Rollover IRA?
A Rollover IRA is an account that allows you to move funds from your old employer-sponsored retirement plan into an IRA. With an IRA rollover, you can preserve the tax-deferred status of your retirement assets, without paying current taxes or early withdrawal penalties at the time of transfer. A Rollover IRA can provide a wider range of investment choices that may meet your goals and risk tolerance, including stocks, bonds, CDs, ETFs, and mutual funds.
What can you do with an old 401(k)?
- Roll over your 401(k) to an IRA.
- Roll over your 401(k) to a new employer's plan.
- Leave in your former employer's 401(k) plan.
- Cash out your money.
Why combine multiple 401(k) accounts?
- Administrative fees may be lower.
- You can simplify your overall financial situation.
- You may find more investment choices that work for you.
If you would like more IRA information, you have two options:
- By phone: (800) 624-8976, and one of ECIA insurance specialist will service your immediate insurance needs.
- Or, fill out a contact request form, and someone will contact you the same day, or worse case the following day.