UnionBanc Investment Services
IRA options
The tax advantages1 of an individual retirement account (IRA) may make it the right choice for investing your retirement savings.
Which type of IRA is right for you?
IRAs come in many different forms to meet the needs of different investors. Explore the various IRAs we offer to determine which one is right for your situation.
Traditional IRA
With a traditional IRA, contributions you make in a given year may be tax-deductible. Once distributions begin in retirement they’re taxed like regular income. Anyone who has earned income or a spouse with earned income (if you file jointly) can contribute. After you reach age 73 you must begin taking required minimum distributions (RMDs). If you expect to be in a lower tax bracket during retirement, a traditional IRA may be right for you.
Roth IRA
While contributions to a Roth IRA are not tax-deductible, withdrawals in retirement may qualify for tax-exempt treatment. And unlike a traditional IRA, there are no RMDs while you are alive. There are limits on who can contribute to a Roth IRA based on your modified adjusted gross income (MAGI). If you expect to be in a higher tax bracket during retirement, you may want to consider a Roth IRA.
Inherited IRA
If you inherit an IRA or employer-sponsored retirement plan after the original owner passes away, this is known as an inherited IRA or beneficiary IRA. Eligible IRAs include traditional, Roth, rollover, SEP and SIMPLE IRAs. Assets from the original IRA must be transferred to the inherited IRA and be in the new beneficiary’s name. Many RMD rules apply to inherited IRAs.
Rollover IRA
When you switch jobs, you choose what to do with the assets in your former employer’s 401(k). You may want to leave the money where it is, cash it out (which may incur taxes or penalties), move it to your new employer’s plan or roll it over to a rollover IRA. Prior to deciding, consider whether you’ll incur any sales charges and/or penalties for selling your existing investments and whether you’ll be charged additional sales charges for purchases made within your new rollover IRA.
SEP IRA
A simplified employee pension (SEP) IRA is a retirement account funded by business owners for their employees which offers tax-deductible and tax-deferred investment growth until retirement. Once payments begin they are taxed as income, similar to a traditional IRA. Self-employed individuals may also open a SEP IRA for themselves.
Insights from our affiliate
Roth IRA benefits: Roth IRA vs. traditional IRA accounts
Unlike a traditional IRA, a Roth IRA allows you to contribute after-tax dollars now and withdraw contributions tax-free in retirement.
IRA vs. 401(k): What’s the difference?
If you’re eligible, it’s possible you could contribute to multiple retirement accounts, so it’s helpful to know how they compare.
Saving vs. investing: What’s the difference?
You know that putting money aside for the future is important. But do you know the best strategies to tackle both saving and investing in the years ahead?
Meet with a financial advisor.
IRAs can be an important part of your retirement planning. With your goals in mind, a UnionBanc Investment Services Financial Advisor will help you consider your options.