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IRAs

Traditional IRA

Anyone with an earned income can contribute to a Traditional IRA. There is no age limit. Traditional IRAs offer the advantage of tax-deductibility and you may realize your tax savings up front by deducting the amount of your contribution each year from your federal income taxes, depending upon your income and whether you participate in an employer-sponsored retirement plan, such as a 401(k) plan.

  • Contributions may be fully tax-deductible. However, the deduction may be limited if you or your spouse is covered by a retirement plan at work and your income exceeds certain levels.
  • Generally, amounts in your traditional IRA (including earnings and gains) are not taxed until you take a distribution (withdrawal) from your IRA.
  • Early withdrawals can be made penalty-free for qualifying reasons such as higher education expenses, first-time home purchases, qualifying medical expenses and more

Roth IRA

  • With a Roth IRA, there is no tax deduction for contributions, but your earnings are still untaxed,  and you generally don’t pay taxes on qualified distributions.
  • There are exceptions to the early withdrawal penalty, such as a first-time home purchase, college expenses, and birth or adoption expenses.
  • Although you pay taxes on the money you put into a Roth IRA, the investment earnings in the account are tax-free. Also, when you reach age 59 ½ and at least 5 years has passed since you first contributed to the Roth IRA, withdrawals are tax-free and without penalties.
  • If you own a Roth IRA, there's no mandatory withdrawal at any age.
  • Roth IRAs do not require withdrawals until after the death of the owner.

Educational IRA

  • Contribution Limits- $2,000 per year until the child is age 18. There are some exceptions to those rules for special needs beneficiaries.
  • Contributions are not tax deductible, but amounts deposited in the accounts grow tax-free until withdrawn.  Distributions that are applied to payment of the qualified education expenses of the designated beneficiary will generally not be considered taxable income for the beneficiary.
  • Unused funds can be rolled over into another Educational IRA account for an eligible family member before the beneficiary reaches age 30.

IRA Share Savings Account

Enjoy the tax benefits of an IRA with the flexibility of a savings account with Essential's IRA Share Savings Account.

  • Minimum $5 balance to earn above average monthly dividends
  • Chat with an Essential representative to assist setting up an IRA or rolling over an existing IRA to Essential

Note: The information on this page is intended to be a reference for our members. It in no way should be taken as investment advice. Consult a tax professional on any tax implications concerning any investments.