RETIREMENT

TRADITIONAL IRA

• Best if you want your money to grow tax-deferred until you retire
• Any age with taxable compensation is eligible to contribute
• Maximum contribution limits
  Contributions Limits for 2022:
  • $6,000 if under age 50
  • $7,000 if age 50 or older
• Pay no taxes until you take distributions
• Tax deductions
  Depends on:
  • Your earnings
  • Whether you (or your spouse, if married) participate in an employer’s retirement plan
  • Your tax filing status
• Distributions
  • Reportable and may be subject to income tax
  • Distribution are IRS penalty-free after age 59½
• Required minimum distribution mandatory at age 70½

ROTH IRA

• Best if you want both tax-free growth and tax-free withdrawals
• Any age with taxable compensation is eligible to contribute
• Maximum contribution limits
  Contributions Limits for 2022:
  • $6,000 if under age 50
  • $7,000 if age 50 or older
• Tax-free when you take distributions
• Contributions are not tax deductible
• Distributions
  • Tax-free after 5 year IRS holding period and you are 59½
  • Distribution of a contribution is IRS tax and penalty-free
• No required minimum distribution

SEP IRA

• Best if you want a plan if you’re self-employed or a small business
• Only the employer can make contributions
• Maximum contribution limits
  Contributions Limits for 2022:
  • Employer contributions that are lesser of 25% of employee’s compensation or $61,000
• Pay no taxes until you take distributions
• Tax deductions
  • The lesser of your contributions or 25% or employee’s compensation (limited to $305,000) not to exceed $61,000
  • If you’re self-employed, your business can generally deduct the contributions you make to your own SEP IRA
• Distributions
  • Reportable and may be subject to income tax
  • Distribution are IRS penalty-free after age 59½
  • Required minimum distribution mandatory at age 70½