A traditional individual retirement annuity (IRA) is a type of retirement plan that allows earnings to grow tax-deferred. An IRA also offers the possibility for tax-deductible contributions up to the maximum limit if you meet certain requirements. Tax-deductible contributions have eligibility requirements based on income, filing status and participation in other retirement plans. You don’t pay income taxes on tax-deductible IRA payments or any earnings until you withdraw money, which is usually at retirement.
Similar to other retirement plans, IRA’s have annual contribution limits. The annual contribution limits for IRA’s are significantly lower than 403(b) or 457(b) plans. Your total payments (to Roth and traditional IRAs) may not exceed the limit established by the IRS for that year.
2020 maximum contribution:
$6,000 (under age 50)*
$7,000 (age 50+)*
*subject to meeting income requirements
Are you a business owner? We also offer SEP (Self Employment Plan) and SIMPLE IRA’s that can allow you to contribute more money per year and are not subject to the same income requirements. Contact us today for more information about these offerings.