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Individual Retirement Accounts

Individual Retirement Accounts (IRAs) are special tax-advantaged savings accounts created to encourage Americans to save money toward retirement and for other important financial needs

Traditional IRA

The Traditional IRA gives you a tax deduction each year in which you contribute to your account, subject to IRS limits and eligibility. Taxes on all contributions and earnings are deferred until withdrawals are made. Penalties may apply if withdrawals are made prior to age 59 ½ and distributions are required to start in the year in which you obtain the age of 70 ½. There are limited exceptions to both.

Roth IRA

The Roth IRA, funded with after-tax contributions, offers tax-free accumulation plus tax-free withdrawals in retirement for those that meet the income eligibility limits. Penalties may apply if withdrawals are made prior to age 59 ½, depending on the circumstances, however, there is no current IRS requirement to withdraw money at any age.

Inherited IRA

When inheriting an IRA from a loved one, there are many planning considerations to be made. If the ultimate goal is to maximize the value of the assets received, it is important to be informed and avoid common, costly mistakes.

Managing the available options can be tricky. A rollover done incorrectly, or check issued to the beneficiary personally, can cause serious tax consequences and/or penalties – and even worse, may reduce the amount of time those funds remain in the tax deferred account.

Let a Cutter & Company professional help you navigate this complex area to ensure you end up with the most effective savings vehicle possible.

For more information about our firm and the services we offer, send us a quick email or call the office. We would welcome the opportunity to speak with you.

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