FFM - IRA's

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“IRA stands for "Individual Retirement Account" and permits you and your spouse to invest pre-tax money on a tax deferred basis. Providing you are not an active participant in a company sponsored pension plan, you may be able to take a full federal income tax deduction made to an IRA.”

Mark R. Fielder
President, FFM, LTD.

As long as you are under the age of 70 ˝ and working, you meet the eligibility requirements to fund a tax deductible IRA account. Your contribution to an IRA is limited to $5,000 or 100% of your compensation whichever is less. For those 50 and above the allowable amount is $6,000.

Prior to the enactment of the 1997 TRA, non-working spouses could only contribute $250 to an IRA account. Now, a non-working spouse may contribute $5,000 or $6,000 and, effective in 1998 is able to receive a deduction on the contribution amount – even if the other spouse is participating in a qualified plan at work.

If neither spouse is participating in a tax qualified pension plan at work, the regular $5,000 or $6,000 contribution for each may be fully tax-deductible. However, as with many other tax-qualified plans, there are phase out reductions (based on AGI) and other qualifications under IRA plans.

Under current law, IRA distributions which are made prior to age 59 ˝ may be subject to a 10%, IRS-imposed tax penalty. Consult your tax advisor.

At age 70 ˝ you must begin taking distributions from your IRA’s. Current law states that distribution is to occur April 1 of the calendar year following the year that you turn age 70 ˝. The amount you must withdrawal is equal to the account value divided by the life expectancy of you or the combined lives (typically husband & wife) of the income beneficiaries. However, effective January 2001, substantial changes have been made with respect to minimum distribution calculations. Please consult your tax advisor.

Distributions can be made in a variety of ways including periodic withdrawals, life annuity, lump sum, period certain, or a joint and survivorship annuity payments.

IRA’s are still a very popular savings method. However, the Roth IRA is an alternative that some investors might find more appealing. One of the reasons may lie in the fact that although they forego the tax deduction, they gain tax-free distributions on the other end.

Action To Take

We have a wide variety of IRA plans to choose from, so whether you are an aggressive, moderate or conservative investor, we should be able to match you with the appropriate investment program.

If you would like to learn more about IRA’s and the various funding options available, please click HERE to request further information.

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(Please note: your registration information will not be released to any other party without your express written consent)

Securities are offered through Girard Securities, Inc. member FINRA, SIPC.
Mark R. Fielder, Registered Principal. CA. Insurance Lic. # 0690576.