IRAs

Meet the eligibility requirements and you can deduct contributions to a traditional IRA from your federal taxable income, as well as from your taxable income in most states. This up-front tax break may reduce the current income taxes you owe. Also, money in a traditional IRA accumulates tax deferred. You'll eventually have to pay taxes, but not until you make a withdrawal.

• You can contribute to your IRA any time during the year or by the due date for filing your tax return - always April 15 - extensions do not apply.
• If you make early withdrawals before age 59 1/2, you'll owe a 10% tax penalty on the taxable portion of the distributions. You'll also owe income tax on your earnings and on any deductible contributions you made.
• There are exceptions to the early withdrawal penalties: you have unreimbursed medical expenses exceeding 7.5% of your adjusted gross income, have health insurance premiums due to unemployment, are permanently disabled, have qualified higher education expenses, are a first-time homebuyer (lifetime limit of $10,000), or are the beneficiary of a deceased IRA owner.
• By April 1 of the year following the year in which you reach age 72, you must either withdraw your entire balance or start taking required minimum distributions each year.

Roth IRA earnings grow tax-deferred, and for qualified distributions, your earnings can also be withdrawn tax-free. But there are rules, and they can be complex:

• Roth IRA contribution limits vary by tax year, income level and tax filing status (single, married filing jointly), so you may want to work closely with a financial professional.
• You can contribute to your IRA any time during the year or by the due date for filing your tax return - always April 15 - extensions do not apply.
• If you need to dip into your nest egg early, Roth rules differ and can be complex. Unlike a traditional IRA, you can withdraw up to the total amount of your annual contributions at any time, for any reason, with no federal taxes or penalties due.
• Another advantage Roth IRAs have over traditional IRAs is there are no required minimum distributions during an owner's lifetime. Minimum distribution rules, however, do apply after the death of the owner.

*This information is not intended to be a substitute for specific individualized tax advice. We suggest that you discuss your specific tax issues with a qualified tax advisor. A Roth IRA offers tax deferral on any earnings in the account. Qualified withdrawals of earnings from the account are tax-free. Withdrawals of earnings prior to age 59 or prior to the account being opened for 5 years, whichever is later, may result in a 10% IRS penalty tax. Limitations and restrictions may apply.

A rollover IRA is a retirement account that allows you to move money from your former employer-sponsored plan to an IRA--penalty-free--while keeping your money's tax-deferred status.

Rollover Account Benefits

• You won't pay taxes on potential growth until you make withdrawals--and can still make contributions to the account. 
• Access to your money Withdraw penalty-free for certain life events, like a first-time home purchase, a birth, or college expenses. 
• Investing options You can generally choose from a wider range of investments than you can in an employer's retirement plan

What happens if your IRA outlives you?

Inherited IRAs are specifically designed for individuals who are named as beneficiaries on a retirement account, like an IRA or workplace savings plan, such as a 401(k).

• Rules for inherited IRAs vary depending on the type of beneficiary you name.
• Spouse beneficiaries have options for an inherited IRA that aren't available to other types of beneficiaries.
• Most non-spouse beneficiaries will need to liquidate an inherited IRA within a 10-year period.
• Some beneficiaries, known as Eligible Designated Beneficiaries, can stretch distributions over their own lifetime.