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IRAs and ESAs

Plan for your best future.

Let us help! If you already work with a tax advisor, they're a great resource, too.

Individual Retirement Accounts (IRAs) and Coverdell Education Savings Account (ESAs) are ways to ensure your future self is setup for success.  

  • An IRA helps build retirement savings because of the tax advantage it provides.
  • An ESA offers a similar tax advantage but is designed to assist primarily with future education expenses.

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IRAs

An Important Note About Tax-Advantaged Accounts — IRAs and ESAs

We want you to have a smooth, trouble-free experience with your IRA or ESA. That means getting off to a good start... and, to be honest, it can be a little complicated. But over 40 million people invest in Traditional IRAs and over 30 million in Roth IRAs, so it's possible to do succesfully!

Straight talk: There are many rules related to tax-advantaged accounts. Before you contribute, it's important to have an understanding of these limitations:

  • Eligibility
  • Contribution Limits
  • Deductibility
  • Tax Advantages
  • Withdrawal Penalties
  • Distribution Rules
  • Conversion Rules. That's a lot.

Traditional IRA

A Traditional IRA can be a smart solution to increase your tax-deffered retirement savings.  

Eventually, you'll be taxed on your contributions and earnings.

  • Grow potential earnings tax deffered
  • No income limitations to opening an account
  • Current year contributions may be tax deductible
  • Other non-retirement expenses may be eligible
  • Confirm your eligibility. There are additional limits and options.

Once you turn 59 1/2, you can access your funds penalty free.  

ROTH IRA

With a Roth IRA account, you won't pay taxes as your money potentially grows, and you can make tax-free withdrawals during retirement.  

  • No contribution age restrictions
  • Earnings grow tax-free
  • Qualified tax-free withdrawals
  • No mandatory withdrawals (unlike a Traditional IRA)
  • No income taxes for inherited Roth IRA funds may also be used to purchase a first home
  • Confirm your eligibility. There are additional limits and options.

Qualified withdrawals after age 59½ are tax-free and penalty free.  

Coverdell ESA

A Coverdell ESA is great way to help pay for your child's educational expenses, such as tuition, fees, books, supplies, and equipment.  

The account earnings grow on a tax-deferred basis.  Withdrawals are tax-free when the funds are used for qualified education expenses.  A beneficiary can be anyone younger than 18.

  • Annual contribution limit is $2,000 per year
  • Contributions to a Coverdell ESA are allowed until the beneficiary turns 18
  • Funds must be distributed once the beneficiary turns 30 years old
  • Confirm your eligibility. There are additional limits and options.

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