2022 – 02/01 – The Ins and Outs of IRAs

Traditional and Roth IRAs can help you save for retirement on a tax-favored basis. Contributions to a traditional IRA reduce your current tax bill, if you’re eligible, and earnings are tax-deferred. However, withdrawals are taxed in full (plus a 10% penalty if taken before age 59½, unless an exception applies). Roth IRA contributions aren’t deductible. But earnings are tax deferred and withdrawals are tax free if certain conditions are met. The maximum annual IRA contribution is $6,000 for 2022 and 2021 ($7,000 if age 50 or over). In addition, your contribution can’t exceed your compensation includible in income for the year. There’s no age limit for making contributions if you’re eligible.


Posted in