Citi Personal Wealth Management
The following content is complex, and you should consult an expert about this topic.
As the name suggests, an Individual Retirement Account (IRA) can help you save and invest for retirement. Depending on which type you select, traditional or Roth, you'll receive certain tax and savings advantages—powerful tools to help you with your retirement goals. But as you'll see below, there are several differences between traditional and Roth IRAs. Learning about them can help you decide which is better for you.
For current contribution limits to both visit: IRS
|Required Minimum Distributions|
|Income Eligibility Limits|
|Benefits Common to Both|
|Accessing Your Money|
Withdrawals are permitted at any time and subject to ordinary income tax. But withdrawals taken before age 59 and a half will also incur a 10% penalty for early withdrawal.
Penalty–free conditions include;
Contributions can be withdrawn at any time without taxes or penalties. If you've held a Roth IRA, including converted accounts, for less than five years and withdraw earnings before reaching age 59, you may be subject to income tax and a 10% early withdrawal penalty. Exceptions to the penalty for early withdrawal are the same as those with a traditional IRA.
If you're considering rolling over money from an Individual Retirement Account (IRA) or employer retirement plan, make sure you understand the rules before making a decision, including that you may be able to leave your money where it is. Here's a brief summary:
Employer Retirement Plans. When leaving an employer, you typically have four options on what to do with your retirement benefit in an employer sponsored retirement plan (and may engage in a combination of these options):
In many cases, you don't have to act immediately upon switching jobs or retiring. The decision to transfer funds out of an employer's plan is irrevocable. Before making a decision, take time to assess factors such as your age, financial needs, personal situation, fees and expenses, investment options and services.
IRA Rollovers. Unlike employer retirement plans, IRAs have different rules on rollovers, including that youcan make only one rollover from an IRA to another (or the same) IRA in any 12-month period, regardless ofthe number of IRAs you own.
To learn more about rollover rules, speak with one of our Citi Personal Wealth Management Financial Advisors, who follow practices and procedures to ensure clients are receiving the most appropriate guidance for their individual situations.
The transfer, rollover and withdrawal of retirement assets in IRAs, 401ks and other types of qualified accounts are governed by specific rules and laws and may involve significant tax consequences and limitations. Before making any decisions regarding the disposition of your retirement accounts, please consult your tax advisor or accountant.
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The above content is for informational purposes only and contains a summary of the topic and is not intended to be a comprehensive discussion, including any legal or tax ramifications of the strategies or concepts described herein. These strategies are not guaranteed to succeed or indicate future performance, and they do not necessarily represent the experience of other clients.
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