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Individual Retirement Accounts

Retiring? Making a career change? If you will be receiving dollars from a retirement plan sponsored by your former employer, let PlantersFIRST help you avoid unnecessary taxes and penalties by rolling those dollars into an Individual Retirement Account (IRA).

If you are currently saving for your retirement, take advantage of the new higher contribution limits for Traditional and Roth IRAs. You may qualify to contribute up to $6,000 per year. IRAs still offer tax advantages for most contributors.*
As a small business owner consider the SEP or SIMPLE IRA plan as a way to provide retirement savings to yourself and your employees.*

*Consult your tax advisor

Traditional IRA

If you are younger than age 70 ½ for the entire tax year and have compensation, you are eligible to establish and make an annual tax-year contribution to a traditional IRA. Youare eligible even if you already participate in certain government plans, a tax sheltered annuity, a simplified employee pension (SEP) plan or a Savings Incentive Match Plan for Employers (SIMPLE), or a qualified pension or profit-sharing plan established by an employer.

The traditional IRA allows you to defer taxes on the earnings on your contributions until they are withdrawn. Certain contributions are tax deductible in the tax year for which you make them.

Roth IRA

A Roth IRA is an individual retirement account that allows only nondeductible contributions but features tax-free withdrawals for certain distribution reasons after a five year holding period.

Since Roth IRA contributions are nondeductible and taxed in the year they are earned, if you expect to be in a higher tax bracket when you retire, you may benefit more from a Roth IRA than from a traditional IRA.

Savings Incentive Match Plan (SIMPLE)

A SIMPLE, or Savings Incentive Match Plan for Employees of Small Employers, is a salary reduction arrangement similar to a 401(k) plan. However, SIMPLE contributions are deposited into a unique SIMPLE IRA. This IRA can only accept contributions under a SIMPLE. No other IRA contributions are permitted.

Simplified Employee Pension (SEP)

Simplified Employee Pension plans (SEPs) can provide a significant source of income at retirement by allowing employers to set aside money in retirement accounts for themselves and their employees. Under a SEP, an employer contributes directly to traditional individual retirement accounts (SEP-IRAs) for all employees (including the employer). A SEP does not have the start-up and operating costs of a conventional retirement plan and allows for a contribution of up to 25 percent of each employee’s pay.

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