Are you concerned that you won’t have enough to live the life you want in retirement?
An Individual Retirement Account (IRA) is a tax-advantaged account that can help you enhance your total financial picture and potentially build wealth for retirement.
A Merrill financial advisor can help you establish retirement savings strategies designed to pursue your individual goals.
Tax-advantaged investing for retirement
There are two common types of IRAs: Traditional and Roth.
With a traditional IRA, contributions may be tax-deductible and the assets have the potential to grow tax-deferred.1 However, the assets may be subject to ordinary income tax when distributed.
In contrast, contributions to a Roth IRA are made with after-tax dollars and are not tax-deductible.2 Distributions from Roth IRAs are free of federal taxes, and may be state tax-free, as well.3
There are important differences between a traditional IRA and a Roth IRA – and your choice depends on factors such as your age, current income, distribution goals and tax objectives.
Talk to your Merrill financial advisor to discuss whether an IRA is appropriate for you.
Traditional Roth IRA Fact Sheet
Merrill and its financial advisors do not provide tax, accounting or legal advice.
Any tax statements contained herein were not intended or written to be used, and cannot be used, for the purpose of avoiding U.S.
federal, state or local tax penalties. Please consult your own independent advisor as to any tax, accounting or legal statements made herein.
Your contributions may be tax-deductible, depending on your tax-return filing status, your modified adjusted gross income and whether you or your spouse are eligible to participate in employer-sponsored retirement plans.
2. To be eligible to contribute to a Roth IRA, your Modified Adjusted Gross Income must be below specified limits.
3. For a distribution from a Roth IRA to be federal (and possibly state) income tax-free, it must be qualified.
Bank Of America - Merrill Edge - Starting A Retirement Account By Signing Up For Roth IRA
A qualified distribution from your Roth IRA may be made after a five-year waiting period has been satisfied (this period begins January 1 of the tax year of the first contribution or the year of conversion to any Roth IRA) and you (i) are age 59½ or older, (ii) are disabled, (iii) qualify for a special-purpose distribution such as the purchase of a first home (lifetime limit of $10,000), or (iv) are deceased.
If you receive a non-qualified distribution from your Roth IRA, such distribution generally will be subject to ordinary income tax, plus a 10% additional federal tax if received before age 59½ unless an exception applies.