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Individual Retirement Account (IRA)

Overview

Consider an IRA

It doesn't matter how old (or young) you are — if you haven't started saving for retirement, you need to, now. Even if you have started, it doesn't hurt to do more. There are many different kinds of IRA options available.

SOLUTIONS

Traditional IRAs

  • Your money grows on a tax-deferred basis.
  • Contributions to your IRA may be tax deductible.
  • You can get to your money without a distribution penalty at age 59 ½.

Coverdell Education Savings Accounts (CESAs)

  • Earnings accumulate on a tax-free basis and withdrawals are penalty-free if used for qualified higher education expenses.
  • Contributions are not tax deductible.

 

Converting a Traditional IRA to a Roth IRA

  • For some individuals, converting a Traditional IRA to a Roth IRA can have beneficial tax implications. Prior to converting to a Roth IRA, you should consult your tax advisor. Please visit your local BBVA Compass Banking Center for more information.

Roth IRAs

  • Your money grows on a tax-free basis, which is even better than tax deferred. Withdrawals of interest earnings are tax-free and penalty-free if the account has been open at least 5 years and the owner is 59 ½ or older or meets other qualifying distribution rules.
  • And, you have flexibility to withdraw principal (already-taxed funds) without being taxed or penalized by the IRS, even before you hit your golden years.

Rollover IRAs

  • If you've changed jobs and withdrawn money from your old company's 401(k) plan, you need to put it somewhere quickly (within 60 days) or you could owe the government some serious cash. And a Rollover IRA may be a good option. We can explain your other options, and send you a copy of our Retirement Distributions Options kit. Just give us a call.

Why Invest Now?

It's simple.

The sooner you start, the more money you'll have. And the longer you wait, the less you could have. Here's a startling (and real) example:

How Much You Put In vs. Total Account Worth

This chart shows the total account worth of your IRA if you start saving at 21.

IRA Chart

Now see what happens if you wait until age 35 to start.

IRA Chart

These charts assume annual contributions and a 3% rate of return compounded monthly. Your own plan may earn more or less than this example and income taxes would be due when you withdraw from your plan.