Individual Retirement Account Calculators
These calculators are provided for
reference purposes only and made
available to you as self-help tools
for your independent use. We can not
and do not guarantee their accuracy
or their applicability to your
circumstances. We encourage you to
seek personalized advice from
qualified professionals regarding
all personal finance issues.
Taxable vs. Tax
- Helps compare a normal taxable investment to
two common tax advantaged situations: An
investment where taxes are deferred until
withdrawals are made, and an investment where
taxes are paid on money that goes into the
account, but all withdrawals are tax free.
Roth 401(k) or
- Help determine the better option for your
retirement between the Roth 401(k) or
Traditional IRA or Roth IRA
What's the Difference? Tax Deductions or Tax-Free
Traditional IRA - The traditional IRA is an account which allows you
to defer taxes on your earnings until they are withdrawn. Also, certain
contributions are tax deductible in the year they are made.
Roth IRA - The Roth IRA is a nondeductible account that features
tax-free withdrawals for certain distribution reasons after a five-year
holding period. Since Roth IRA contributions are nondeductible and taxed in
the year they are earned, people, who expect to be in a higher tax bracket
when they retire may benefit more from these accounts than from a
IRA --Almost anyone under the age of 70 1/2 and with an earned income is
eligible to establish a traditional Individual Retirement Account (IRA). A
Traditional IRA can be established in addition to any type of government
plan, tax-sheltered annuity, simplified employee pension plan, or a
qualified plan provided by an employer. In addition, many employer sponsored
plans offer limited investment options, but a traditional IRA can provide
greater flexibility and hold almost any investment.
Roth IRA-- If you are one of many who expect to be in the same or a
higher tax bracket in retirement, paying taxes now on a Roth IRA may save
you money over the long run. Roth IRA contributions are nondeductible and
taxed in the year they are earned.
It is in your best interest to seek the guidance of a
tax or legal professional before contributing to a Roth IRA since the IRS
has income restrictions.
- Age 50 and over
*Consult your tax advisor.
Do I Pay Taxes on the Earnings?
Traditional IRA - All earnings on your traditional
IRA contributions (deductible and/or nondeductible) remain tax deferred
until you make withdrawals from the account. They are then taxed as income in
the year they are withdrawn.
Roth IRA - No taxes are
paid on the earnings provided you withdraw the earnings as part of a
qualified distribution. That's the best part of the Roth IRA. When you're
ready to take a withdrawal, you pay no taxes on any of the earnings that
your money has generated.
Talk with a
near you for more information about Individual Retirement Accounts.
When Can I Withdraw Funds without
Incurring any IRS Penalties?
• First-time home purchase
• Medical expenses - with exceptions
• Health Insurance premiums - if unemployed
• Higher education expenses
• Qualified reservist
• Qualified HSA funding distribution
• Customer has reached age 59 ½
• IRS tax levy
Traditional IRA -
Distributions from traditional IRAs and most employer-sponsored retirement
plans are taxed as ordinary income and may be subject to an additional 10
percent federal income tax penalty if taken prior to reaching age 59½ or for
one of the 9 reasons listed above.
Roth IRA -
a traditional IRA or an employer sponsored retirement plan, a Roth IRA is
not subject to annual required minimum distributions after age 70½. As
long as Roth IRA withdrawals take place after age 59½
or for one of the 9 reasons listed above, and the account has been open for at least five years,
distributions will be free of federal tax and penalties.
When Must I Withdraw Funds?
Traditional IRA - When you reach your age 70½
year, you must begin to take minimum required withdrawals or severe
penalties will be imposed.
Roth IRA - There are no
required distributions from a Roth IRA.
Talk with a
near you for more information about IRA withdrawals.
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