Traditional & roth IRA plans
Grow your savings and tax-free retirement withdrawals
A Roth IRA (Individual Retirement Account) is a retirement savings account that allows you to pay taxes on the money you put into it up front.
TRADITIONAL & ROTH
2019 Contribution Levels
Max Annual Contribution
Max Annual Contribution and *Catch-up Contribution
Who is eligible?
Traditional IRA
Anyone under age 70 1/2 with earned income, regardless of income level. A non-working spouse may also contribute up to the maximum amount allowable, as stated above.
Roth IRA
The allowable contribution limit, as stated above, is phased out for individuals with adjusted gross incomes between $122,000 – $137,000 (single) and $193,000 – $203,000 (joint).
What are the tax advantages?
Financial organizations do not determine or track deductible contributions. The deductibility of an IRA contribution is determined by the IRA holder (and/or a competent tax advisor).
Traditional IRA
Tax-deferred investment growth and possible tax deduction for contributions. Taxes not paid on deductible contributions and all earnings until money is withdrawn.
Roth IRA
Tax-free investment growth if the account has been open and funded for five years and certain requirements are met.
Is my contribution deductible?
It depends on an IRA holder’s active participation in an employer retirement plan. Marital status and modified adjusted gross income (MAGI), based on the IRS Form 1040 information may also affect the deductibility of contributions.
Is the IRA holder an active participant?
if no
Then is the IRA holder married to an active participant?
if no
The deductibility of eligible contribution depends on MAGI
if yes
The deductibility of eligible contribution depends on MAGI
Is there an age limit for contributions?
Traditional
No
Roth IRA
YES
What are the withdrawal rules?
Traditional
Withdrawals can be made penalty-free prior to age 59 1/2 to help pay for purchase of a first home or for education (taxes apply to all earnings and all deductible contributions withdrawn). Certain withdrawal amounts made prior to age 59 1/2 may be subject to additional 10% penalty tax.
Roth IRA
Similar to regular IRA provision. However, the account must be open and funded for at least five years to qualify for a tax-free withdrawal of investment earnings upon reaching age 59 1/2; becoming disabled; purchasing a first home; or due to death.
Are roll-overs and transfers permitted?
Traditional
You may transfer to and from other IRAs. You may roll-over from employer plans.
Roth IRA
You may transfer a traditional IRA to a Roth IRA (if adjusted gross income is no more than $100,000). Taxes must be paid on deductible contributions and all earnings when a Traditional IRA is converted to a Roth IRA, but 10% penalty tax does not apply.
How Is Your Money Protected?
- The PNA is supervised by various Insurance Departments within the states it operates.
- PNA is on the legal reserve system and is audited annually by an independent CPA firm.