The Benefits of IRAs

in Financial Wellness
With the tax filing deadline approaching, have you considered contributing to an Individual Retirement Arrangement (IRA)?

IRAs are one of the most powerful retirement savings tools available to you. Even if you’re contributing to a workplace retirement plan, you may want to consider having an IRA as well. You may be eligible for a full or partial federal tax deduction with a traditional IRA. This can be especially valuable if you are already contributing the maximum to your workplace plan, such as a 403(b) or 457(b).

There’s still time to make an IRA contribution for the 2017 tax year.

The deadline is Tuesday, April 17. For 2017 and 2018, you can contribute up to $5,500 per year, and up to $6,500 if you are (or will be) age 50 or older this year.1

There are two types of IRAs: traditional and Roth. The same $5,500 annual contribution limit applies to both. While you can have both traditional and Roth IRAs, your total annual contribution to all IRAs that you own cannot be more than the annual limit established by the I.R.S.

Earnings in both kinds of IRAs grow tax-deferred, but there are significant differences between a traditional IRA and Roth IRA.

Traditional IRAs: This type of IRA offers you a great way to help lower your taxable income. Almost anyone who earns taxable compensation can open one. Contributions may be tax-deductible as described above, but your contributions and the IRA’s earnings are taxed when withdrawn. You cannot make contributions after age 70½; at that point, annual income distributions must be taken from the IRA.1

Roth IRAs: Contributions are not tax-deductible. However, distributions of contributions and earnings are free from federal taxes after a five-year holding period if you meet certain requirements, such as being age 59½ or older when the distribution from the Roth IRA is made.1

A traditional IRA may be right for you if you want to reduce your yearly taxable income during your working years. A Roth IRA might make more sense if you want to minimize taxes during retirement, when you may be in a lower tax bracket. We can help you determine which one is more beneficial for you, considering your individual circumstances.

Keep in mind that your Roth or traditional IRA contribution must be made before this year’s April 17 federal tax filing deadline, so call us today at 877-794-6712.


For more information on investing, contact Bob Skillings – Financial Advisors with SouthPoint Investment Services.

Bob Skillings

706 N German St. New Ulm, MN 56073; 877-794-6712; Direct: 507-233-5624; Cell: 507-217-9038; Fax: 507-233-5601; [email protected]



1 [1/30/17]

Securities and advisory services offered through Cetera Advisor Networks LLC, member FINRA/SIPC. Investments are: • Not FDIC/NCUSIF insured • May lose value • Not financial institution guaranteed • Not a deposit • Not insured by any federal government agency. Cetera is under separate ownership from any other named entity.

A portion of this material was prepared by MarketingPro, Inc., and does not necessarily represent the views of the presenting party, nor their affiliates. All information is believed to be from reliable sources; however we make no representation as to its completeness or accuracy. Please note – investing involves risk, and past performance is no guarantee of future results. The publisher is not engaged in rendering legal, accounting or other professional services. If assistance is needed, the reader is advised to engage the services of a competent professional. This information should not be construed as investment, tax or legal advice and may not be relied on for the purpose of avoiding any Federal tax penalty. This is neither a solicitation nor recommendation to purchase or sell any investment or insurance product or service, and should not be relied upon as such. All indices are unmanaged and are not illustrative of any particular investment.

Limitations and Early Withdrawals: Some IRAs have contribution limitations and tax consequences for early withdrawals. For complete details, consult your tax advisor or attorney.Retirement Plans: Distributions from traditional IRAs and employer sponsored retirement plans are taxed as ordinary income and, if taken prior to reaching age 59 ½, may be subject to an additional 10% IRS tax penalty.
Roth IRA: Converting from a traditional IRA to a Roth IRA is a taxable event. A Roth IRA offers tax free withdrawals on taxable contributions. To qualify for the tax-free and penalty-free withdrawal or earnings, a Roth IRA must be in place for at least five tax years, and the distribution must take place after age 59 ½ or due to death, disability, or a first time home purchase (up to a $10,000 lifetime maximum). Depending on state law, Roth IRA distributions may be subject to state taxes.

You have requested an external link.

 By clicking this link, you are leaving SouthPoint’s website and entering a website hosted by another party. We do not operate this site, nor are we responsible for its content. Please review the privacy and security policies of the site you are entering, as they may differ from those practiced by the credit union.

Cancel Accept