Individual Retirement Accounts (IRA)
The key to building a retirement nest egg is beginning early and contributing annually. If you're eligible, IRAs can offer you some tax advantages. At Minnwest, we offer two different IRAs. A Minnwest representative can get you started and explain the details.
Whether it's a Traditional or Roth IRA, 2011 contributions are:
The main advantage of a Traditional IRA is that contributions are tax-deductible (based on retirement plan coverage, adjusted gross income and filing status). If you are covered by an employer-sponsored plan or your adjusted gross income is too high, you contributions may not be tax deductible.* Your initial contributions and interest earnings are subject to taxation when you begin withdrawing funds at retirement.
Roth IRAs primarily differ from Traditional IRAs in that the contributions are not tax-deductible, but all the interest earned on the account is tax-exempt. When you begin taking qualified withdrawals from an IRA, all the funds, including interest earned, will be tax-free. This is quite an advantage when every dollar counts if you are on a fixed income in later years. There are some income eligibility limits for a Roth IRA, especially if you are in a higher wage bracket. Our Minnwest representatives can walk you through them.
* Consult your tax advisor for advice on deductibility in your situation.