IRA Management


Individual Retirement Account (IRA): a tax-deferred retirement account for individual investors.

Individual Retirement Account (IRA) rollover: a tax-free reinvestment of a distribution from a qualified company retirement plan such as a 401(k) into an IRA. The rollover must be deposited within 60 days of the distribution to qualify. This 60-day requirement may be waived by the IRS. An IRA rollover allows these funds to continue to accumulate tax-deferred until they are withdrawn.

Types of Individual Retirement Account (IRA)

Traditional IRA: an Individual Retirement Account in which funds grow tax-deferred until they are withdrawn at age 59-1/2 or later. Mandatory distributions from a Traditional IRA begin by age 70-1/2. Contributions are deductible against earned income under certain circumstances, depending on income levels and retirement plan participation.

Roth IRA: a type of Individual Retirement Account (IRA), which allows funds to grow tax-free, subject to certain restrictions. Usually, the account must be held for at least five years and withdrawals must be made after age 59-1/2. Taxes are paid on contributions to a Roth IRA, but qualified withdrawals are tax-free. Unlike a Traditional IRA, there is no requirement to begin taking distributions at age 70-1/2.

• Premature withdrawals may be subject to IRS penalties.