How does an IRA work?
An IRA offers you a tax-advantaged way to set aside money for retirement. It’s a personal savings plan in the form of a custodial account set up for the exclusive benefit of you or your beneficiaries. An IRA is not an investment in itself; rather, it’s a type of account that holds the investments you select.
What’s a traditional IRA?
A traditional IRA allows your investment to grow tax-deferred, meaning you pay no taxes on earnings until they’re withdrawn. Typically, you can’t withdraw from a traditional IRA without paying income tax plus a 10% federal penalty tax until you reach age 59½. You must begin withdrawing money by the year after you turn 70½.
Anyone with earned income can contribute to a traditional IRA. For some people, contributions to a traditional IRA are tax-deductible—meaning a contribution will reduce their income tax bill. For instance, someone who doesn’t participate in a qualified employer retirement plan can deduct his or her entire contribution to a traditional IRA. Plan participants can deduct contributions only if their modified adjusted gross income doesn’t exceed certain limits, depending on their filing status.
In addition, most married couples filing a joint return—even those in which one spouse has little or no compensation—can make IRA contributions.
What’s a Roth IRA?
A Roth IRA offers tax-free investing: You pay no taxes on withdrawals made after you reach age 59½ if you’ve owned a Roth IRA for the 5-year minimum holding period. Although contributions to Roth IRAs aren’t tax-deductible, you’re never required to make withdrawals, so your assets can grow tax-free throughout your life. (The beneficiary of a Roth IRA may be required to take withdrawals.) You must not exceed certain income limits to qualify for a Roth IRA.
Which IRA is best for me—Traditional or Roth?
The answer depends on your financial situation now and what you expect it to be in the future. For example, if you’re a participant in an employer-sponsored retirement plan and you have a relatively high income (up to certain limits), a Roth IRA may be the appropriate choice because a contribution to a traditional IRA wouldn’t be deductible on your tax return. If you exceed the income limits for a Roth IRA, the only choice you’ll have is to make after-tax contributions to a traditional IRA—which still allows your investments to grow tax-deferred.
When deciding on a type of IRA, it also helps to think about how your tax situation might change following retirement. If you expect to be in a lower income tax bracket when you retire, a traditional IRA may be more suitable. Why? Because contributions may be tax-deductible now (depending on your income), and you’ll probably pay taxes at a lower rate when you make withdrawals.
How Much Does It Cost?
We operate under a fee-for-service engagement model. Fees are paid monthly from Members’ IRAs and consist of four components:
1. Membership Fee – $60 Annually (waived for active contributes)
2. Program and Technology Fee –.32% Annually
3. Investment Management and Advisory - .18% Annually
4.. Activity Fee – a fixed dollar amount for certain transactions, charged on a per incident basis (ex. check writing fees, wire transfer fees, etc.).
We do not retain any revenue by way of commission payments, including any payments originating from investment companies,Such payments, if any, are rebated to Member IRAs.
Can I Cancel At Any Time?
Yes, you can cancel at any time. To cancel, simply call our office and one of our IRA Consultants will help you to transfer or disburse your account.