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IRAs

Whether you prefer to manage your own retirement funds or you would like the financial assistance of our licensed professionals, an IRA (Individual Retirement Account) can provide greater tax advantages for your retirement savings than other investment accounts.

Traditional IRAs offer tax-deferred growth, so you won’t pay taxes on your account until you withdraw the money. You may also qualify for a full or partial deduction for contributions on your tax return.

Setting money aside in a Traditional IRA allows you to grow your investment while potentially earning a tax deduction.

It isn't available to everyone, but individuals under the age of 70 ½ with an earned income, and not covered by an employer qualified retirement plan, can take advantage of this option.

Even if you are covered by an employer's plan you may still be able to contribute to a Traditional IRA depending on your income and marital status. Or you may want to consider a Roth IRA.

Traditional IRAs at a Glance

  2015/16
Annual Maximum Contribution $5,500
Additional Catch-up Contribution for Individuals Age 50+ $1,000
Tax-Deductible Contributions Yes
Minimum Required Distribution (MRDs) age 70 ½
Minimum Age to Take Withdrawals Without Penalties 59 ½
Earnings Grow Federal Income Tax-Deferred Yes
Annual Fee None

Withdrawals

  • 10% early withdrawal penalty may apply for withdrawals taken prior to age 59½ if no exceptions apply
  • Penalty-free withdrawals for first home purchase and certain college expenses

IRA Deduction Limits

The above is general information regarding IRAs, and does not take your unique, personal circumstances into account. It is not intended to be complete and should not be relied upon in making final decisions concerning IRA accounts. The information is not meant to constitute legal or tax advice. Please contact your tax professional for full details or visit the IRS website at www.irs.gov.

Roth IRAs offer you the benefit of tax-exempt growth. You make contributions after you've paid federal income taxes, so you won’t be taxed again when you withdraw the money. Certain conditions apply.

Roth IRAs are a great, tax-efficient way to save for your retirement. A Roth IRA also offers a valuable future tax break: Tax-free income in retirement. Roth IRAs make the most sense if you expect your tax rate to be higher during retirement than your current rate. That makes Roth IRAs ideal savings vehicles for young workers who won’t miss the upfront tax deduction and who will benefit from decades of tax-free, compounded growth. Roth IRAs also appeal to anyone who wants to minimize their tax bite in retirement as well as older, wealthier taxpayers who want to leave assets to their heirs tax-free.

To qualify for a Roth IRA, you must have “earned income” in the year you want to make a contribution, and be below a certain income level. If you don’t qualify for a Roth IRA you may want to consider a Traditional IRA.

Roth IRAs at a Glance

  2015/16
Annual Maximum Contribution $5,500
Additional Catch-up Contribution for Individuals Age 50+ $1,000
Tax-Deductible Contributions No
Minimum Required Distribution (MRDs) None
Minimum Age to Take Withdrawals Without Penalties 59 ½
Earnings Grow Federal Income Tax-Deferred Yes
Annual Fee None

Distributions

Once a Roth IRA has been held for five years, distributions are income tax free under the following criteria:

  • You have reached age 59½
  • Qualified first-time home purchase (lifetime $10,000 limit)
  • Qualified higher education expenses*
  • Medical expenses in excess of 7.5% of adjusted gross income (AGI)
  • Payment of health insurance premiums if unemployed
  • You have a disability

Distributions that do not meet the distribution criteria may be taxable and subject to a 10% federal income tax penalty.

Limits on Roth IRA Contributions Based on Modified AGI

*Generally include tuition, books, supplies and equipment at an eligible educational institution.

The above is general information regarding IRAs, and does not take your unique, personal circumstances into account. It is not intended to be complete and should not be relied upon in making final decisions concerning IRA accounts. The information is not meant to constitute legal or tax advice. Please contact your tax professional for full details or visit the IRS website at www.irs.gov.

Rollover IRAs allow you to consolidate your 401(k) plans and other employer-sponsored plans to keep your savings tax-deferred and typically offer broader investment choices

The above is general information regarding rolling over your 401(k) plan, and does not take your unique, personal circumstances into account. It is not intended to be complete and should not be relied upon in making final decisions concerning IRA accounts. The information is not meant to constitute legal or tax advice. Please contact your tax professional for full details or visit the IRS website at www.irs.gov.

Inherited IRAs are not something most people want to think about, but something we can help you with. Tax laws surrounding Inherited IRAs can be complicated, so in addition to talking with one of our Financial Advisors, you should seek the advice of a tax professional.

The above is general information regarding IRAs, and does not take your unique, personal circumstances into account. It is not intended to be complete and should not be relied upon in making final decisions concerning IRA accounts. The information is not meant to constitute legal or tax advice. Please contact your tax professional for full details or visit the IRS website at www.irs.gov.

Make sure your retirement plan is on track – meet with one of our Financial Advisors. They are available to meet with you at any People's United Bank location and they have the know-how to help you determine what retirement solutions are right for you.  Call today at 800-392-3009 to schedule an appointment or click here to find a Financial Advisor near you.

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Disclaimer



Investment and Insurance Products:

  • Not Insured by FDIC or any Federal Government Agency
  • Not a Deposit of or Guaranteed by a Bank or any Bank Affiliate
  • May Lose Value

Investment and insurance products are offered through People’s Securities, Inc., a Broker/Dealer, member of FINRA and SIPC, an insurance agency and a registered investment advisor. People’s Securities, Inc. is a subsidiary of People’s United Bank, N.A.

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