IRAs - Retirement Plan Services

Simple IRA

These are IRA accounts established by employers for the benefit of their employees. Simple IRAs are available only to employers with 100 employees or less. The employee is able to defer/contribute up to $12,500 of wages, ($15,500 for those age 50 and older) and the employer is generally required to match the employee’s contribution up to 3% of the employee’s wages. This type of employer-sponsored retirement account is less burdensome for the employer than other types of IRA programs.

Managed or Self-Directed Individual Retirement Accounts (IRA's)

This is an account established by any person for the purpose of saving money in a tax-advantaged environment. This account is not sponsored by an employer. The earnings on this account are tax deferred and, in some cases, never taxed. There are several types of Individual Retirement Accounts (IRAs) such as Traditional, Roth, or Conduit, as discussed below. For 2015, the annual contribution limit was $5,500. For those 50 and older, there was an additional $1,000 catch up provision.

Traditional IRA

A retirement account for individuals who receive compensation included in gross income and who are not age 70½ or older during the tax year. The contribution may be deducted from taxable income, subject to limitations. All distributions from this account are generally subject to income tax unless non-deductible contributions were made into the plan.

Roth IRA

A retirement account for individuals who receive compensation included in gross income. There is no age 70 1/2 limitation. The contribution to this account is NOT deducted from taxable income. Distributions from these accounts are not taxable as long as the account has been open for five (5) years and the individual has attained the age of 59½ or takes a "qualified special purpose" distribution. There is an income limit for contribution eligibility.

Conduit IRA

A retirement account to hold distributions from employer sponsored tax qualified retirement plans.

Coverdell Educations Savings Account

This is an account intended to provide for the beneficiary’s education. The annual contribution limit is $2,000 per eligible beneficiary. An eligible beneficiary is someone under the age of 18. Earnings on contributions will be distributed tax-free provided they are used for the beneficiary’s education expenses prior to the beneficiary attaining the age of 30. The annual contribution is not deductible from income.

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