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IRA

IRAs for your retirement strategy
There are quite a few ways an IRA can work for you, so consider all of your options.
An individual retirement account (IRA) can be a tax-advantaged way to invest for retirement. It can serve as your primary means of investing for retirement, or you may be able to open one in addition to your employer's plan. When you have a retirement account with a former employer, sometimes it can make sense to roll your assets into an IRA to give you a bit more freedom.

There are two types of IRAs: traditional and Roth. Anyone with earned income can open one. Let’s go.

Which IRA option best fits you?

Let’s compare traditional and Roth IRAs

There are two types of individual retirement accounts (IRAs) to help you save for retirement: traditional IRAs and Roth IRAs. Here's how they differ.

There are certain income and other eligibility limitations that may impact you. It is important to review this information before making a decision. Please review this information by clicking the following link.

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TRADITIONAL
Summary
Contributions to traditional IRAs may be income tax deductible and proceeds in the account grow tax-deferred. Distributions are generally taxed as ordinary income.
Contributions
Pretax, lowers current taxable income*
Earnings
Tax deferred
Withdrawals
Income tax due on all distributions (10% IRS penalty may apply before age 59½)
Required minimum distributions (RMDs)
Begin at age 70½.
ROTH
Summary
Contributions are made on an after-tax basis. Proceeds in the account grow and are distributed income tax free when certain requirements are met.**
Contributions
After tax
Earnings
Tax free**
Withdrawals
No tax due on qualified withdrawals**
Required minimum distributions (RMDs)
No RMDs
TRADITIONAL
Summary
Contributions to traditional IRAs may be income tax deductible and proceeds in the account grow tax-deferred. Distributions are generally taxed as ordinary income.
Contributions
Pretax, lowers current taxable income*
Earnings
Tax deferred
Withdrawals
Income tax due on all distributions (10% IRS penalty may apply before age 59½)
Required minimum distributions (RMDs)
Begin at age 70½.
ROTH
Summary
Contributions are made on an after-tax basis. Proceeds in the account grow and are distributed income tax free when certain requirements are met.**
Contributions
After tax
Earnings
Tax free**
Withdrawals
No tax due on qualified withdrawals**
Required minimum distributions (RMDs)
No RMDs

Let your goals be your guide.

Think you’re ready to roll?

People change jobs for a variety of reasons, and navigating these transitions can be challenging. When you leave work – for whatever reason – you have a decision to make about the money in your retirement plan. Generally, you have four main options to choose from.

Take a few moments to consider the advantages and disadvantages. Consider these four options:

Advantages
  • A retirement counselor can help you pick an appropriate investment strategy and answer retirement planning questions.
  • Investment gains in your account remain tax-deferred.
  • Avoid early withdrawal penalties and taxes associated with cashing out your account.
  • Consolidation of your retirement assets may make asset allocation and rebalancing easier.
  • Gain independence from your former employer.
Disadvantages
  • You cannot borrow money against an IRA.
  • Assets may not be fully protected from the claims of some creditors.
Review the fees and expenses you pay, including any charges associated with transferring your account, to see if rolling over into an IRA or consolidating your accounts could help reduce your costs. Employer-sponsored retirement plans may have features that you may find beneficial such as access to institutional funds, fiduciary-selected investments, and other ERISA protections not afforded other investors. In deciding whether to do a transfer from a retirement plan, be sure to consider whether the asset transfer changes any features or benefits that may be important to you. 
Advantages
  •     Investment gains in your account remain tax-deferred.
  •     Avoid early withdrawal penalties and taxes associated with cashing out your account.
  •     Fiduciary oversight is managed by the plan trustee.
  •     Penalty-free withdrawals may be made from the plan if you are 55 or older the year you separate from service.
  •     Assets are protected from the claims of creditors.
Disadvantages
  • You typically cannot contribute additional outside assets to the plan.
  • Your investment options may be limited to what's offered by the plan.
  • Some retirement plans do not offer flexible distribution options, such as systematic withdrawals.
  • Many 401(k) plans do not offer participants access to advice. If your 401(k) is with Transamerica, you'll still have access to a retirement counselor for general retirement questions.
Advantages
  • Investment gains in your account remain tax-deferred.
  • Avoid early withdrawal penalties and taxes associated with cashing out your account.
  • Fiduciary oversight is managed by the plan trustee.
  • Assets are protected from the claims of creditors.
Disadvantages
  • The new employer's plan may not allow rollovers from previous employer-sponsored plans.
  • The new employer's plan may have less flexibility than an IRA and may have fewer investment options. 
Review the fees and expenses you pay, including any charges associated with transferring your account, to see if consolidating your accounts could help reduce your costs. Be sure to consider whether such a transfer changes any features or benefits that may be important to you. 
Advantages
  • You will have cash readily available.
Disadvantages
  • You will lose the opportunity for tax-advantaged growth and compounding.
  • You could be subject to a 10% federal tax penalty (if you cash out before age 59½).
  • The IRS requires withholding of 20% as prepayment of your federal income tax.
  • You may also be subject to state withholding for prepayment of state income taxes.
  • You could pay more in income taxes.

You're unique. Your investing strategy should be, too.

Learn about our comprehensive planning solution for people looking for financial advice, Transamerica Personalized PortfoliosSM.
LEARN MORE

A new age of self-employment

The increasing prevalence of the self-employed calls for changes in how people invest and get ready for retirement. The Aegon Center for Longevity and Retirement has recommendations for helping self-employed workers prepare for retirement in its “Retirement Preparations in a New Age of Self-Employment” report.

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Roth IRA: A wealth transfer strategy

Converting to a Roth IRA may potentially allow you to leave your heirs a larger tax-free legacy.

Make tax time less taxing

Single? Married filing jointly? This is your at-a-glance resource for current year tax rates for you and your family.

We're here to help

Let a retirement counselor answer your questions, discuss your needs, and help you be healthy and wealthy. 
866-300-0028

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