Thinking about your future? We are, too.

Whatever your plans are for retirement, it’s important to have a savings strategy in place. An Individual Retirement Account (IRA) is a convenient, cost-effective way to achieve your goals, offering flexibility and tax advantages you can’t get anywhere else.

Maybe you want to defer your taxes until retirement when your tax bracket will likely be lower. In that case, a traditional IRA might be right for you. How about enjoying tax-free returns later on by paying them now through a Roth? No problem. You can even use the money for education needs through a Coverdell Education Savings Account. It’s as simple as a payroll deduction.

Regardless of which plan you choose, you can expect competitive returns, convenient accessibility, and peace of mind that your future is in good hands.

According to federal law, you can contribute:

  • $6,000 a year per individual.
  • $12,000 for couples filing jointly.
  • $7,000 for investors over 50.
  • $14,000 for couples, both over 50.
  • $2,000 for Coverdell Education Savings Accounts.

Traditional IRA Changes Due to the SECURE Act

The SECURE Act went into effect January 1st, 2020, and with it came sweeping changes to Traditional IRAs. The SECURE Act – or Setting Every Community Up for Retirement Enhancement – primarily makes changes to contribution ages and Required Minimum Distributions, commonly referred to as RMDs.

How the law changes Required Minimum Distributions for Traditional IRAs

Under previous law, you had to begin taking your RMD at 70 ½. The SECURE Act raises this requirement age to 72.

  • Members who turned 70 ½ years old in 2019 or earlier will still need to withdraw their RMD in 2020, and continue each year. The new law does not change anything for those members

  • Members who are expected to turn 70 ½ years old in 2020 will not be required to withdraw their RMD until they are 72

How the law changes contributions for Traditional IRAs

For the taxable year 2020 and beyond, the law removes the age limit at which an individual can contribute to an IRA. The Act allows anyone that is working and has earned compensation to contribute to a Traditional IRA – regardless of age.

Note that you must be employed during the year of the contribution. If you are retired, you may not make Traditional IRA contributions.

How can I learn more?

For a full summary of the House Committee on Ways and Means’ overview, click here.

Helpful reference material regarding IRAs and enrollment (click to expand):

Traditional and Roth IRAs

Traditional IRAs

Roth IRAs

Transfers, Rollovers, and Conversions

IRA and Retirement Plan Distributions

Coverdell ESAs

Retirement Plans

Health Savings Accounts

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