IRAs
Once you start saving, retirement starts to look a lot brighter. Individual Retirement Account (IRA) options are available for both employees and employers who know the power of long-term growth.
Traditional IRA.
With a Traditional IRA, your pretax income, up to a specific annual limit, is put into an investment account. The funds in your Traditional IRA are then placed in stocks, bonds, and other investments. Then your money grows tax-deferred, meaning that any income is not taxed until the funds are withdrawn.
Roth IRA.
A Roth IRA is a retirement savings plan where your money is invested in stocks, bonds, and other investment options. Unlike a Traditional IRA, however, the money you put in a Roth IRA is taxed before it’s invested. There are also limits on the amount you can contribute each year, and these limits are not tax-deductible. But here’s the good news: after certain criteria are met, qualified distributions are tax free.
SEP IRA.
A Simplified Employee Pension (SEP) IRA is a retirement savings plan for small business owners or self-employed individuals that is easy to maintain. As an employer, an SEP IRA allows you to contribute to a retirement plan for your employees — and enjoy minimal IRS filings and paperwork. This plan follows the same investment, distribution, and rollover rules as a Traditional IRA. However, a larger contribution limit is one advantage over the Traditional IRA.
SIMPLE IRA.
A SIMPLE (Savings Investment Match Plan for Employees) IRA is a retirement savings plan that allows small business owners (100 employees or less) to contribute to employee plans. You can choose to make a 2% mandatory contribution to the plan or offer a 3% matching contribution that helps your employees save, too. A SIMPLE IRA follows the same investment, distribution, and rollover options as a Traditional IRA.
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Contributions to a Traditional IRA may be tax deductible in the contribution year, with current income tax due at withdrawal. Withdrawals prior to age 59 1/2 may result in a 10% IRS penalty tax in addition to current income tax.
The Roth IRA offers tax deferral on any earnings in the account. Withdrawals prior to age 59 1/2 or prior to the account being opened for 5 years, whichever is later, may result in a 10% IRS penalty tax. Future tax laws may change at any time and may impact the benefits of Roth IRAs. Their tax treatment may change.
SEP and SIMPLE IRA distributions taken prior to age 59 1/2 may be subject to a 10% penalty tax, in addition to ordinary income tax; minimum distributions required at age 70 1/2; exceptions to 10% penalty may apply.
Securities offered through LPL Financial, Member FINRA*/SIPC*. Insurance products offered through LPL Financial or its licensed affiliates. The investment products sold through LPL Financial are not insured Lake Trust Credit Union deposits and are not NCUA insured. These products are not obligations of Lake Trust Credit Union and are not endorsed, recommended or guaranteed by Lake Trust Credit Union or any government agency. The value of the investment may fluctuate, the return on the investment is not guaranteed, and loss of principal is possible. Lake Trust Credit Union and Lake Trust Financial Life Planning are not registered broker/dealers and are not affiliated with LPL Financial.
This website may contain concepts that have legal, accounting and tax implications. It is not intended to provide legal, accounting, or tax advice. You may wish to consult an attorney, tax advisor or accountant regarding your specific situation. No representations are made as to the accuracy of the information contained herein or any information contained in any link provided herein.
LPL Financial’s Privacy Policy*
*Third party website. Lake Trust Credit Union is not responsible for the content, availability, security or compliance of any linked third party websites. In addition, the site’s privacy policies may differ from those of Lake Trust.
Important Consumer Information:
This site is for informational purposes only and is not intended to be a solicitation or offering of any security and;
1. Representatives of a broker/dealer (“BD”) or investment advisor (“IA”) may only conduct business in a state if the representatives and the BD or IA they represent (a) satisfy the qualification requirements of, and are approved to do business by, the state; or (b) are excluded or exempted from the state’s licensure requirements.
2. Representatives of a BD or IA are deemed to conduct business in a state to the extent that they provide individualized responses to investor inquiries that involve (a) effecting, or attempting to effect, transactions in securities; or (b) rendering personalized investment advice for compensation.
The Roth IRA offers tax deferral on any earnings in the account. Withdrawals prior to age 59 1/2 or prior to the account being opened for 5 years, whichever is later, may result in a 10% IRS penalty tax. Future tax laws may change at any time and may impact the benefits of Roth IRAs. Their tax treatment may change.
SEP and SIMPLE IRA distributions taken prior to age 59 1/2 may be subject to a 10% penalty tax, in addition to ordinary income tax; minimum distributions required at age 70 1/2; exceptions to 10% penalty may apply.
Securities offered through LPL Financial, Member FINRA*/SIPC*. Insurance products offered through LPL Financial or its licensed affiliates. The investment products sold through LPL Financial are not insured Lake Trust Credit Union deposits and are not NCUA insured. These products are not obligations of Lake Trust Credit Union and are not endorsed, recommended or guaranteed by Lake Trust Credit Union or any government agency. The value of the investment may fluctuate, the return on the investment is not guaranteed, and loss of principal is possible. Lake Trust Credit Union and Lake Trust Financial Life Planning are not registered broker/dealers and are not affiliated with LPL Financial.
This website may contain concepts that have legal, accounting and tax implications. It is not intended to provide legal, accounting, or tax advice. You may wish to consult an attorney, tax advisor or accountant regarding your specific situation. No representations are made as to the accuracy of the information contained herein or any information contained in any link provided herein.
LPL Financial’s Privacy Policy*
*Third party website. Lake Trust Credit Union is not responsible for the content, availability, security or compliance of any linked third party websites. In addition, the site’s privacy policies may differ from those of Lake Trust.
Important Consumer Information:
This site is for informational purposes only and is not intended to be a solicitation or offering of any security and;
1. Representatives of a broker/dealer (“BD”) or investment advisor (“IA”) may only conduct business in a state if the representatives and the BD or IA they represent (a) satisfy the qualification requirements of, and are approved to do business by, the state; or (b) are excluded or exempted from the state’s licensure requirements.
2. Representatives of a BD or IA are deemed to conduct business in a state to the extent that they provide individualized responses to investor inquiries that involve (a) effecting, or attempting to effect, transactions in securities; or (b) rendering personalized investment advice for compensation.