Individual Retirement Accounts IRAs

The Institution for Savings has retirement options with guaranteed returns and no risk to help finance your retirement.

	Traditional IRA	Roth IRA	Simplified Employee Pension (SEP) IRA
Description	Offers a tax-deferred account designed specifically for retirement savings	Offers the potential for tax-free income in retirement	Provides employers with a simplified method to make contributions toward their employees’ retirement and, if self-employed, their own retirement
Tax Benefits	Tax-deferred growth, contributions may be tax-deductible	Tax-free growth, Tax-free qualified withdrawals	Tax-deferred growth, tax-deductible contributions
Eligibility - Age	Under age 70½ with earned income*	Any age with earned income*	Must be at least 21 years of age
Eligibility - Income	No income limits	Income limits apply	Must have worked for employer for at least three of the past five years and receive at least $500 in compensation
Maximum annual contribution for 2015	$5,500 ($6,500 if you are 50 or older) or 100% of earned income*, whichever is less		Up to 25% of employees annual income
Deductible contributions	May be tax-deductible	Not deductible	Tax-deductible to the business
Catch-up contributions	Individuals age 50 or older (in the calendar year of their contribution) can contribute an additional $1,000 each year		Not applicable
Taxation at withdrawal	Distributions are taxable in the year they are received	Qualified distributions are tax free	Distributions are taxable in the year they are received
IRS Penalties at withdrawal	A non-qualified distribution is subject to a 10% IRS penalty unless an exception applies	Withdrawals before 59½ or five years may be subject to a 10% penalty unless an exception applies	A non-qualified distribution is subject to a 10% IRS penalty unless an exception applies
Required Minimum Distributions (RMDs)	RMDs starting at age 70½	Not subject to RMDs during the lifetime of the original owner	RMDs starting at age 70½