About Eastwood
An IRA is an Important Tool in Your Toolbox
An IRA is an important tool to help you plan for a financially secure retirement. Compare and choose your IRA plan options from the chart below; then come to us and we’ll help you select the investment products you’re most comfortable with.
| Roth IRA | Traditional IRA | |
|---|---|---|
Taxes | ||
| Contributions | Contributions are not tax deductible. Contributions can be withdrawn at any time without taxes or penalties.1 |
Contributions are fully tax-deductible if neither you nor your spouse participates in a 401(k) or other employer-sponsored retirement plan, or if your Modified Adjusted Gross Income falls below certain limits. |
| Earnings and Qualified Withdrawals | Earnings and qualified withdrawals are tax-free. Earnings may be withdrawn without taxes or penalties if you are age 59 ½ or older and your account has been open for the five-year holding period. Exceptions to penalties may be made if funds are used for certain purposes, including first-time home purchase ($10,000 lifetime limit), higher education, certain medical expenses, etc. |
All earnings and tax-deductible contributions grow tax deferred and are taxable upon withdrawal. Penalties will be assessed if you make withdrawals before age 59 ½ or if withdrawals do not begin in the year you turn 70 ½. Exceptions to penalties may be made if funds are used for certain purposes, including first-time home purchase ($10,000 lifetime limit), higher education, certain medical expenses, etc. |
Contributions | ||
| Maximum annual contribution | For tax year 2012: up to $5,000; $6,000 for those age 50 and over. For 2013: up to $5,500; $6,500 for those ages 50 or over. |
For tax year 2012: up to $5,000; $6,000 for those age 50 and over, For 2013: up to $5,500; $6,500 for those 50 and over. |
| Eligibility | You must have earned income. Ability to contribute is based on your income. If you earn too much to make a full contribution, you may be able to make a partial contribution. |
You must have earned income. There are no income limits. |
| Contribution age limit | None |
Up to age 70 ½ |
| Distribution requirements | None |
Required after age 70 ½ |
1 - For Traditional-to-Roth conversions, any converted amounts withdrawn within five years may be subject to taxes and penalties.
