You already know there are many retirement options available and risks associated with each. Because you’re a member of APCO, you have an additional opportunity, an APCO Lifetime IRA. An APCO IRA does not expose your principal to losses, is fully insured to $250,000 and earns rates in excess of other safe investment options.
People invest in IRAs for the purpose of lowering their current taxable income. As an example, if your income is $50,000 annually, you’re not covered by a retirement plan at work and you invest the full $5,500 allowed in an IRA, your taxable income is reduced by the amount of your contribution, $5,500. If you are covered by a retirement plan at work, and depending on your income level, partial deductions of your contribution may be allowed. Whatever your situation, some portion of your retirement savings belongs in an APCO IRA.
Only 10% of today’s private sector workers can count on retiring with defined benefit plans. These employer funded plans are all but non-existent today. There is also uncertainty about how much “benefit” Social Security will provide. That means you have to take charge of your own money if you want to retire well.
APCO’s IRA can only improve your retirement outlook. Almost anyone can contribute to a traditional IRA, provided you (or your spouse) receives earned income and you are under the age of 70 1⁄2. It’s generally a good idea to put as much in an IRA as the government allows you to. That’s because the more you save in a tax-deferred account, the more tax-deferred gains you can rack up.
APCO Offers You A Choice
You have until April 15 to make contributions for the tax year 2014. The annual contribution limit for someone age 50 or older is $6,500. This is the IRS’s way of encouraging you to save more in the final years before retirement.
The contributions are fully deductible for singles earning less than $60,000 per year, and married couples filing jointly earning less than $96,000. Those earning more can still make contributions, but the allowed deductible amount is gradually reduced. Withdrawals from traditional IRAs are taxed as regular income, based on your tax bracket for the year in which you make the withdrawal.
The IRS also charges a 10% penalty on withdrawals for those under age 59 1⁄2. That’s because the government wants to discourage you from raiding your IRA until you’re retired. Roth IRAs are another option. However, you cannot exceed certain income limitations in order to make contributions. Contribution limits also apply to Roth IRAs. Roth IRAs are available to singles making less than $114,000 or married couples filing jointly making less than $181,000. Those earning more may make reduced contributions, however, when income exceeds $129,000 for single filers or $191,000 for joint filers, a regular Roth IRA contribution cannot be made for that year.
Roth IRA contributions are not tax deductible. Generally, you may withdraw your contributions from a Roth, penalty and tax free, at any time for any reason. However, you can only withdraw earnings from a Roth IRA, penalty and tax free, after 5 years and age 59 1⁄2. Money converted from a traditional IRA must remain in the Roth for 5 years or you’ll incur a 10% penalty.
Start Building Your IRA Today
Don’t put off planning for retirement. We have the answers to your questions. If you want to build something that lasts, ask about the APCO Lifetime IRA. Call or stop by and talk with one of our IRA experts today.