Traditional IRA
Wouldn’t it be great to have a money tree? The traditional IRA could be the next best thing!
Traditional IRAs offer tax-deferred earnings, and the possibility for tax-deductible contributions.* These tax advantages make the traditional IRA a powerful tool in creating a balanced, long-term savings plan.
You can contribute to a traditional IRA if you earn compensation and you will not reach age 70 1/2 by the end of the year.
*Consult your tax advisor. SC Telco does not offer tax advice - only tax information.
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ROTH IRA
Flexibility. That’s what a Roth IRA offers. Not only can it help with retirement needs, but also a first-time home purchase or some other financial goal. The Roth IRA offers more incentive to boost your retirement savings, as well as more ways to use your nest egg.
Unlike traditional IRAs, your contributions to a Roth IRA are not tax-deductible. However, the money in your Roth IRA, including earnings, may be withdrawn tax-free.*
If you are currently participating in an employer-sponsored retirement plan, there’s no need to worry. Roth IRAs allow you to contribute past the age of 70 1/2 as long as you continue to earn compensation.
What if you already have a Traditional IRA? You can maintain both types of IRAs at the same time! You can even make contributions to both types of IRAs in the same year.
The Roth IRA is more flexible than a traditional IRA because you are not required to start taking minimum distributions when you reach age 70 1/2. If you don’t need the cash, you can let your money continue to grow tax-free for as long as you like.
*Consult your tax advisor. SC Telco does not offer tax advice - only tax information.
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Coverdell Education Savings
An Education IRA (now known as the Coverdell Education Savings Account) can be a smart way to save.
This IRA’s purpose is to help you pay for your child’s education expenses such as: tuition, fees, books, supplies, equipment, and, in some cases, room, board, and computers.
Unlike traditional IRAs, contributions to an Education IRA are not tax-deductible. However, an Education IRA offers you the potential for tax-free withdrawals-including earnings.*
Contributions to a child’s Education IRA may be made until he or she reaches the age of 18. This age limit does not apply to those with special needs.
Anyone who meets the income requirements can open and contribute to your child’s IRA. This includes parents, grandparents, aunts and uncles, family friends, and anyone else who wants to pitch in to a child's education fund!
Traditional and Roth IRAs do offer penalty -free withdrawals for qualified higher-education expenses, but you may still need to pay taxes on those withdrawals. In contrast, withdrawals from an Education IRA are both tax-free and penalty-free if used for qualified education expenses.
*Consult your tax advisor. SC Telco does not give tax advise-only tax information.
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