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January 1, 2019
Looking for a Tax Break? Look at an IRA!
Yes, you certainly will pay taxes. But how much? Let’s say you open a Traditional IRA by December 31 of this year. Any contributions you make right up until April 15 may be tax deductible!
That’s the beauty of Individual Retirement Accounts. More money for you and less money for the tax man. It gets even better, because you won’t pay taxes on any qualified dividends you earn until withdrawal. Not so with other types of savings accounts.
Understanding IRAs.
Now, IRAs do have some complications, like contribution limits. Currently, the Internal Revenue Service caps annual contributions at $5,500. But if you’re 50 or over, that bumps up to $6,500. And if you make too much money, while that’s a nice problem to have, you may not qualify due to income restrictions.
Fortunately, most people can qualify for either a Traditional or a Roth IRA, both of which Grow offers. What’s the difference? Here’s a quick breakdown:
Traditional. Here, if you qualify, you may deduct contributions made during your working years,1 then pay taxes on your distributions in retirement. If you’re not enrolled in an employer-sponsored retirement plan like a 401k, this option may help reduce your annual taxable income.
Roth. Already enrolled in a 401k? Opening a Roth lets you add more to your retirement nest egg. Contributions aren’t tax deductible while you’re working, but once you retire,1 qualified distributions may be all yours, tax free!
Questions? Call 800.839.6328, ext. 2693.
Obviously, IRAs can get a little tricky. That’s why we have people who’ve earned certifications through an accredited training program offered to banks and credit unions. They can help you navigate the ins and outs and will answer your questions in plain language.
The bottom line of an IRA is simply this – it’s too good a deal to pass up. Visit any Grow store and open yours today!
Grow Savings Accounts are subject to ChexSystems® approval.
1Certain restrictions apply. Not all taxpayers are eligible. Consult your tax advisor.
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