Tax season is upon us, Do you know which IRA is right for your? Here are the highlights

Traditional IRA:

·         This type of account may qualify as a deductible contribution for tax purposes. 

·         If you are younger than 50 years of age, you can contribute up to $5,000 per year. 

·         If you are 50 or older, you can contribute up to $6,000 per year.

·         In a traditional IRA the earnings grow tax deferred, which means that the growth (when distributed) will be taxed at the rate you may fall under at the time. 

·         When the account holder turns 70 ½ years of age, it is required he/she takes a required minimum distribution.

·         Distributions can be taken as early as 59 ½ years of age without penalty.

ROTH IRA:

·         Contributions to this account are not tax deductible.

·         If you are younger than 50 years of age, you can contribute up to $5,000 per year. 

·         If you are 50 or older, you can contribute up to $6,000 per year. 

·         Earnings on a ROTH IRA are tax exempt (a.k.a. Tax Free).

·         No minimum distributions are required at age 70 ½.

  

There are more Pros and Cons that need to be taken into consideration.  Please contact alberto@cristanchoandassociates.com for more information.