What is a Traditional IRA Doing for You?
If you’re researching IRA’s you have probably noticed there are traditional and roth IRAs. Traditional IRAs offer those who are eligible thousands of dollars in tax deductions. However, the best part about a traditional IRA is that it allows you the opportunity to invest in your future. If you’re interested in learning more about what a traditional IRA can do for you, keep reading.
Traditional IRA’s – What You Need to Know
When it comes to traditional IRA’s, there are a few key details that you should be aware of.
- There is a contribution limit. For 2019, the limit is $6,000 for those who are younger than 50. For those who are over 50 the limit is $7,000.
- For eligible savers, traditional IRA contributions are deducted in the same year that they are made.
- Retirement distributions are taxed as ordinary income.
- Any investments that grow are tax-deferred, which means you will not be taxed on any gains you make until you withdraw them.
- Any early withdrawals that are made may be taxed as income and receive a 10% penalty. Unless you meet certain conditions.
Benefits of Traditional IRA’s
Fortunately, when it comes to Traditional IRAs there are far more benefits than anything. A few examples of benefits from a Traditional IRA include:
- There are no income limits. So, you can open and contribute to a traditional IRA no matter your income. Technically, everyone is eligible for a traditional IRA.
- Traditional IRA money can be used to pay for qualified college expenses without you having to pay an early distribution penalty. However, you will pay taxes on the distribution.
- Those who have a traditional IRA can use up to $10,000 toward the purchase of their first house. Similar to the above, you will owe taxes but there will be no penalty.
Where Do You Open a Traditional IRA?
Speaking with a trained professional about your goals will help you to decide the best course of action for your IRA. Care Financial is here to help you with retirement planning strategies that will work for you. We offer financial products that help you to succeed in all of the goals for you and your family.
Care Financial is here to help you create and navigate a custom retirement strategy that works for you. Give us a call to schedule your free consultation today at 251-633-7122 or visit us online at www.carefinancialonline.com.