IRA Basics

At Webster, we’ll help you understand the best ways to save for—and realize—the retirement you envisioned.

  • Fast Facts
  • Great for retirement savings
  • Offers tax benefits
  • Supplements future income

Whether your retirement is in the near or distant future, having an Individual Retirement Account (IRA) can go a long way in helping you become financially secure and have the retirement savings you need to enjoy those golden years ahead.

What is an IRA?

IRAs are tax-advantaged savings account designed to help you save for retirement. There are two types of IRAs, Traditional and Roth, each offering their own advantages. Both IRA types offer tax benefits allowing the money you save to compound and grow more quickly than if put it in a taxable brokerage account.

With a Traditional IRA you may be able to contribute pre-tax dollars upfront, which means you can take annual income tax deductions. Your savings will grows tax-deferred, and you pay income taxes at retirement when you withdraw your money.

With a Roth IRA, you ontribute after-tax dollarsupfront, have tax-free growth on savings until retirement, and pay no income taxes when you withdraw money in retirement.

The Roth IRA offers tax deferral on any earnings in the account. Withdrawals from the account may be tax free, as long as they are considered qualified. Limitations and restrictions may apply. Withdrawals prior to age 59 1/2 may result in a 10% IRS penalty tax. Future tax laws can change at any time and may impact the benefits of Roth IRAs. Their tax treatment may change.

Keep in Mind

  • Consult tax advisor/professional regarding your specific situation
  • Taxes will be due with conversion from Traditional to Roth IRAs
  • Premature distributions of contributions are subject to IRS penalties
  • For Traditional IRAs when you reach age 70 1/2, you’re required by law to begin taking withdrawals from your retirement accounts known as Requirement Minimum Distributions (RMDs)

Traditional IRAs Vs Roth IRAs

Need personalized investment advice? Have a Financial Consultant contact me.

To learn more about our IRAs, please call us at 1-888-493-2783, option 4 or visit a Webster branch near you.

 

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