Secure Your Future With An Individual Retirement Account (IRA)
Thinking about saving for retirement? An Individual Retirement Account can help you build financial security while potentially reducing your current tax burden.
Tax Benefits of an IRA
By contributing to an IRA, you may be able to deduct qualified contributions from your taxable income—helping you save on your current taxes. The amount you can deduct depends on factors such as your income, marital status, and whether you participate in an employer-sponsored retirement plan, as defined by the IRS.
Additionally, an IRA allows your savings to grow tax-deferred until retirement, when you may be in a lower tax bracket. The chart below illustrates how much you could save each year based on your tax bracket. Consult a tax professional to determine your eligibility for deductions and other benefits.
IRA Tax Savings Potential
The following chart is for illustrative purposes only. Please consult a tax professional for personalized guidance.
IRA
Contribution Amount |
Tax Bracket |
| 10 % |
15 % |
25 % |
28 % |
33 % |
35 % |
| $500 |
$50 |
$75 |
$125 |
$140 |
$165 |
$175 |
| $1,000 |
$100 |
$150 |
$250 |
$280 |
$330 |
$350 |
| $2,000 |
$200 |
$300 |
$500 |
$560 |
$660 |
$700 |
| $2,250 |
$225 |
$338 |
$563 |
$630 |
$743 |
$788 |
| $4,000 |
$400 |
$600 |
$1,000 |
$1,120 |
$1,320 |
$1,400 |
Rolling Over Your IRA
Changing jobs or retiring? If you're planning to withdraw funds from an employer-sponsored retirement plan, consider rolling them into an IRA to avoid early withdrawal penalties and maintain your tax advantages. You can request a direct rollover from your employer or transfer the funds yourself through an IRA-to-IRA rollover. Keep in mind that rollovers must be completed within 60 days to avoid taxes and penalties.