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Traditional and Roth IRA Plans - Benefits and Requirements

A certified retirement financial advisor, Darcy Bergen has functioned as the president of Bergen Financial Group since 2003. In this role, Darcy Bergen helps older individuals to plan for retirement and estate transfer.

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TRADITIONAL AND ROTH IRA
PLANS - BENEFITS AND
REQUIREMENTS
Darcy Bergen
INTRODUCTION
• A certified retirement financial advisor, Darcy Bergen has
functioned as the president of Bergen Financial Group since 2003.
In this role, Darcy Bergen helps older individuals to plan for
retirement and estate transfer.
The individual retirement account, or IRA, has helped individuals
and couples save for the future since 1974. In 1997, the Taxpayer
Relief Act established a second type of retirement account known
as the Roth IRA.
Although both types of accounts are designed to help savers
protect their wealth, each has different guidelines for
contributions and withdrawals. A traditional IRA holder must be
under the age of 70.5 years, at which time the individual must
begin taking minimal distributions.
IRA PLANS
• A Roth IRA holder can contribute at any time and does
not have mandated withdrawals, though owners pay a 10
percent penalty for any funds withdrawn before age 59.5.
Roth IRAs also compound on a tax-free basis, and
withdrawals incur no income taxes. However, they are
only available to individuals with income of $132,000 or
less or couples with a total income of no more than
$194,000.
Traditional IRAs do not have this cap. However, full tax
deductions are only available to traditional IRA holders
who lack access to a retirement plan or earn below a
specified level. Partial deductions are possible for
individuals or couples with income slightly above the full
deduction cutoff.
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Traditional and Roth IRA Plans - Benefits and Requirements

  • 1. TRADITIONAL AND ROTH IRA PLANS - BENEFITS AND REQUIREMENTS Darcy Bergen
  • 2. INTRODUCTION • A certified retirement financial advisor, Darcy Bergen has functioned as the president of Bergen Financial Group since 2003. In this role, Darcy Bergen helps older individuals to plan for retirement and estate transfer. The individual retirement account, or IRA, has helped individuals and couples save for the future since 1974. In 1997, the Taxpayer Relief Act established a second type of retirement account known as the Roth IRA. Although both types of accounts are designed to help savers protect their wealth, each has different guidelines for contributions and withdrawals. A traditional IRA holder must be under the age of 70.5 years, at which time the individual must begin taking minimal distributions.
  • 3. IRA PLANS • A Roth IRA holder can contribute at any time and does not have mandated withdrawals, though owners pay a 10 percent penalty for any funds withdrawn before age 59.5. Roth IRAs also compound on a tax-free basis, and withdrawals incur no income taxes. However, they are only available to individuals with income of $132,000 or less or couples with a total income of no more than $194,000. Traditional IRAs do not have this cap. However, full tax deductions are only available to traditional IRA holders who lack access to a retirement plan or earn below a specified level. Partial deductions are possible for individuals or couples with income slightly above the full deduction cutoff.