Traditional and Roth IRAs

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Traditional and Roth IRAs 2017-03-13T16:11:48+00:00

Traditional & Roth IRAs 

Federal Life Retirement Plans can be used as Traditional and Roth IRAs.*
Here are some answers to commonly asked questions regarding the use of Traditional and Roth IRAs:

Traditional Roth
How much can I contribute each year? For 2016, $5,500
($6,500 for ages 50+)
 For 2016, $5,500
($6,500 for ages 50+)
What is the minimum income limit? Earned income must be equal to or greater than your contribution.  Earned income must be equal to or greater than your contribution.
Are there age requirements? No, you can contribute at any age. Yes, you must be under age 70 1/2 to contribute.
When can I
withdraw money?
You can withdraw money at any time. You can withdraw money at any time.
What are the tax rules for withdrawals? Withdrawals of contributions are tax free. Withdrawals of earnings are tax free if you’re age 59 1/2 or older & the account is at least 5 years old.   Withdrawals of earnings & deductible contributions are taxed as ordinary income.
What is the penalty for early withdrawal(s)? Withdrawals of contributions are always penalty free.There is a 10% federal penalty tax on withdrawals of earnings before age 59 1/2, unless an exception applies. There is a 10% federal penalty tax on withdrawals of contributions or earnings before age 59 1/2, unless an exception applies.
Required minimum distributions? No. Yes, after age 70 1/2.
Are contributions tax-deductible? No. Yes, if you do not contribute to an employer-sponsored plan (i.e. 401(k), etc.). If you do contribute to an employer-sponsored plan, your deductions depend on your income.

*Products vary by state. Please contact your Federal Life representative or the Home Office to verify availability.

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