Traditional Individual Retirement Account (IRA)

Secure your golden years, one contribution at a time.

A Traditional IRA provides a way to put money away for retirement and offers a tax deferral on qualified contributions. For example, if you make $50,000 and you contribute $2,000 to your Traditional IRA, you would only be taxed on $48,000.* Taxes are then paid on earnings when you withdraw the money upon reaching retirement age.

You can invest in a Traditional IRA if you have income from some sort of earned compensation or if you are filing jointly with a spouse who has income. You can also roll money from a qualified compensation plan—such as a 401(k)—into a Traditional IRA.

While your tax advisor can offer more guidance on which type of IRA best suits your needs, we can answer your questions and assist with opening your IRA. Simply stop by any Bronco office or call us at 757.569.6000.

Currently, you can contribute up to $7,000 annually if you are under 50 years of age. For those 50 and older, the annual contribution limit is $8,000, and contributions cannot exceed compensation. Contribution regulations do change, so contact your tax advisor for advice.

Contributions may be made by:

• Single individuals not active in an employer retirement plan, such as a 401(k).
• Single individuals active in qualified retirement plans with income below Modified Adjusted Gross Income (MAGI) limits.
• Married couples with neither spouse active in an employer retirement plan.
• Married individuals active in qualified retirements plans filing joint tax returns with income below MAGI limits.
• Married individuals not active in qualified retirement plans filing joint tax returns with spouses who are, as long as MAGI is below defined limits.

One additional benefit of a Traditional IRA is there are circumstances when you can withdraw funds before reaching retirement age without being penalized, including:

• Qualified higher education expenses.
• Disability of the account holder.
• Payment to beneficiaries upon the account holder’s death.
• Unreimbursed medical expenses that exceed 7.5 percent of account holder’s adjusted gross income from the previous year.
• Payment of medical insurance premiums if the account holder is unemployed for 12 weeks or longer.
• Expenses associated with buying or building a first home.
• Payment of any IRS levy.
• Birth or adoption expenses.

You can elect to start withdrawing from your Traditional IRA without penalty once you reach the age of 59½. You are required to start taking withdrawals when you reach 72.