The Farmers Roth IRA
Retirement planning benefits of the Taxpayer Relief Act of 1997
The non-deductible, tax-free Roth IRA
Do you currently have a Retirement Program adequate to provide a comfortable life?
The Farmers Roth IRA allows you to buy an Individual Retirement Annuity with after-tax
dollars now and withdraw principal and earnings tax-free after five years. A 10 percent
penalty may apply if you withdraw earnings before age 59 and a half, unless the money
withdrawn is used for a qualified purpose.
With the Farmers Roth IRA, you may qualify for...
-
Tax-free earnings
-
Tax-deferred accumulation of earning
-
Competitive interest rates
-
Substantial lifetime income at retirement
-
Withdrawals without penalty for qualified educational expenses or the purchase of
a new home
The Roth IRA
The Roth IRA can accumulate tax-deferred and can be distributed tax-free! It is, in a
sense, the opposite of a Traditional IRA. Yearly contributions are not deductible
from income, but earnings on the Roth IRA can be tax-free.
These feature distinguish the Roth IRA from the Traditional IRA:
-
No tax deduction for contributions to the account
-
Distribution required only at the death of the contributor
-
Qualified distributions may not be included in income
-
Contributions can be made beyond age 70 and a half
-
Distribution is not required at age 70 and a half
Qualified distribution
Tax-free and penalty-free qualified distribution is possible five years after the
first tax year in which contributions are made if the distribution is due to:
-
Attainment of age 59 and a half
-
Disability
-
First home purchase (limited to 10,000)
-
Death
Non qualified distribution of earnings is taxable income and can be subject
to a 10 percent IRS penalty tax.
Broader Eligibility
There is no age limit for making contributions. You must have earned income equal
to the amount of your contribution, up to $2,000 annually for an individual or a combined
$4,000 with spouses.
Limits on contributions
If your adjusted gross income exceeds $150,000 and you file jointly ($95,000 for
single filers), the amount you may contribute is gradually reduced. The combined total of
Traditional IRA and Roth IRA accounts cannot exceed the maximum annual contribution
of $2,000 per individual.
Rollovers from Traditional IRAs to Roth IRAs
Subject to certain limitations, money can be moved or rolled over from an existing
Traditional IRA into the Roth IRA without the 10% penalty tax. However, the IRS will
treat this transaction as an income-taxable event.
Your Farmers agent can help
Farmers agents offer a variety of retirement planning options, including IRAs and
nonqualified annuities, to meet your retirement planning needs. Farmers Individual
Retirement Annuities can offer significant advantages for maximizing retirement
cash without compromising safety.
There is a heavy cost associated with waiting too long to establish a well-considered
retirement program. Now is the time to discuss your retirement goals and establish a
retirement plan. Contact your Farmers agent and set up a Farmers Friendly Review soon.
|
The Farmers Roth IRA |
The Farmers Traditional IRA |
| Farmers SIMPLE IRA Plans for Small Business Owners |
|
