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Freedom First Credit Union

Is an IRA Right for You?

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Retirement Planning Made Simple


With the tax advantages offered by IRAs, you may want to consider adding an IRA to your investment and retirement portfolio. Anyone with an income can open an IRA. Also, non-working spouses can open an IRA as long as the household’s taxes are filed jointly.

The chart below provides a high level comparison on Roth and Traditional IRAs.


 Roth IRA  Traditional IRA
Eligibility
Income limit: $116,000 for individual; $183,000 for married couple filing jointly.
Age Limit: None
Income limit: None
Age Limit: Must be under age of 70 ½
Annual Contribution
Under age 50: $5,500
Age 50 or older: $6,500
Under age 50: $5,500
Age 50 or older: $6,500
Deductibility
Contributions: Not Deductible
Withdrawals: Tax- and penalty-free in retirement if follow all rules
Contributions: Deductible
Withdrawals: Taxed
Withdrawal Requirements Withdrawals of contributions are penalty-free at any time for any reason. Not required to make RDMs at any age
Over age 59 ½: May make withdrawals without penalty.
Over age 70 ½: Must take required minimum distributions; amount based on amount saved and life expectancy
Penalties for Early Withdrawal Before age 59 ½: may owe a 10% IRS tax penalty in addition to federal and state taxes on withdrawals of earnings. Before age 59 ½: may owe a 10% IRS tax penalty in addition to federal and state taxes on distributions.

In addition to these two IRAs, if you are self-employed or a small business owner, you may want to consider SIMPLE or SEP IRAs. A wealth manager can help guide you to the best choice based on your own personal goals and circumstances.

Freedom First Wealth Management
207 Albemarle Ave. SW • Roanoke, VA • 24016
Phone: (540) 400-7611 or toll free 888-548-7793 x105

There is no assurance that the techniques and strategies discussed are suitable for all individuals or will yield positive outcomes. This information is not intended to be a substitute for individualized legal advice. Please consult your legal advisor regarding your specific situation.

Securities offered through LPL Financial, Member FINRA/SIPC. Insurance products offered through LPL Financial or its licensed affiliates. Investment Advice offered through Level Four Advisory Services, a registered investment advisor. Level Four Advisory Services, Freedom First Credit Union, Freedom First Wealth Management are separate entities from LPL Financial. The LPL Financial representative associated with this website may discuss and / or transact securities business only with residents of the following states: CA, DC, FL, MD, NC, SC, TX, VA, WA
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