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IRA, ROTH & SEP ACCOUNTS
ABA Roth Tax Savings Calculator

 

Traditional IRA Roth IRA

QUALIFICATIONS

Must have earned income and not have reached
age 70 1/2 by the end of the year.
Must have earned income.  
There are no age restrictions.

MAXIMUM CONTRIBUTIONS

2016 - $5,500
(SIMPLE IRA - $12,000)
2016 - $5,500
(subject to income limitations, refer to IRS website)

CATCH-UP (50+ OVER)

 $1,000
(SIMPLE IRA - $2,500)
$1,000

TAX STATUS OF EARNINGS

Tax-deferred until withdrawal Not taxed.  Earnings grow tax-free.
If you don't have a workplace retirement plan, such as a 401(k), you can deduct contributions from federal and state income taxes. If you have a 401(k) or other workplace retirement plan, you may be able to deduct a portion depending on your income.  For more information click here.
TAX DEDUCTION YES. 
Contributions up to the limit are fully tax deductible if you are not an active participant in a retirement plan.  Otherwise phase-out rules apply.
NO.  
These are after-tax dollars.
IRS PENALTIES FOR EARLY WITHDRAWAL

None if:

  • Over 59 1/2
  • Death or disability
  • Qualified medical expense
  • Certain health insurance
  • Higher education expenses
  • 1st time home purchase (up to $10,000)
  • Due to IRS levy
  • Periodic payments

None if made after a
 5-year period and:

  • Over 59 1/2
  • Death or disability
  • Qualified medical expense
  • Certain health insurance
  • Higher education expenses
  • 1st time home purchase (up to $10,000)
  • Due to IRS levy
REQUIRED DISTRIBUTION Must begin by April following year
participant turns 70 1/2
Only after death of participant
CONTRIBUTIONS AFTER AGE 70 1/2 Not allowed Allowed

 

SIMPLIFIED EMPLOYEE PENSION PLAN - SEP ACCOUNTS
If your employer chooses to set up SEP accounts for their employees, then you may select a Money Market, Savings or Time Deposit account for your investment.  For more information click here.