National Life IRAs

Why IRAs. Why now.

Because IRA's can be a powerful tool for long-term financial goals.

Retirement Goals

Powerful tool for long-term financial goals.

Compound Interest

Interest compounds year-over-year, making a significant difference in overall retirement savings.

Tax Deferred

Depending on the IRA, clients can defer taxes on the money going in now or have tax free withdrawal of the money coming out later if Roth rules are met.

Lower Adjusted Gross Income

A tax-deductible IRA contribution lowers adjusted gross income (AGI), which is used to calculate certain itemized tax deductions, as well as your client's tax rate.

Consolidation of Retirement Accounts

Explain the benefits of consolidating their qualified accounts into an IRA to protect their retirement, and of continuing to contribute to their retirement.

Take a look at the four most common types of IRAs and identify your clients for whom they may work well.

Types of IRAs

Traditional IRA: Pre-Tax Contribution
For clients seeking tax-deferral on contributions and a tax deduction.

	The basics Contributions may be made regardless of income – deductibility may be limited based on AGI 10% IRS tax penalty applies to withdrawals of both contributions and earnings if made prior to age 59 ½, with certain exceptions Withdrawals are taxed as ordinary income Required Minimum Distributions (RMDs) must start at age 72

	May work well for a client who… Needs a tax deduction Wants to save in a tax-deferred vehicle but is okay with paying taxes on withdrawals in retirement Anticipates their income tax bracket at retirement to be lower than their current bracket Has maxed out contribution to their employer-sponsored plan, has income below the deductibility limits, and would like to save more Does not have access to an employer-sponsored retirement plan

Roth IRA: Post-Tax Contribution
For clients seeking tax-free withdrawals in retirement.

	The basics Withdrawals are tax free if Roth has been in place for five years and one of the following: Age 59 ½ Disability First time home purchase up to $10,000 Client may contribute at any age Contributions may be made if income limits are not exceeded There are no Required Minimum Distributions (RMDs) 10% IRS tax penalty applies to withdrawals of earnings only if made prior to age 59 ½, with certain exceptions

	May work well for a client who… Wants tax-free withdrawals at retirement Anticipates their income tax bracket at retirement to be higher than their current bracket Has maxed out contribution to their employer-sponsored plan and would like to save more Does not have access to an employer-sponsored retirement plan

SEP-IRA (Simplified Employee Pension
For small business owners seeking retirement benefits and a business tax deduction.

	The basics Plan is solely funded by business owner Contributions are not required every year but must be the same percentage of pay for all employer(s) and employees Policies are owned by the employees; contributions are immediately vested Withdrawals are taxed as ordinary income Distribution prior to 59 ½ subject to 10% IRS Early distribution penalty

	May work well for a client who… Is self employed Owns a business with few (or no) employees Wants to attract and retain employees Needs a significant tax deduction

Types of IRA Rollovers

Payment made directly to another retirement plan or to an IRA.
The administration may issue the distribution in the form of a check made payable to the client's new account.
No taxes will be withheld from the transfer account.

Payment directly from the IRA to another IRA or to a retirement plan.
No taxes will be withheld from the transfer amount.

Distribution is paid directly to the participant.
Participant can deposit all or a portion of it in an IRA or retirement plan.
Taxes will be withheld from a retirement plan distribution; client will need to use other funds to roll over the full amount of the distribution.

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