Traditional Michigan IRA: Savings vehicles with tax advantages
IRA (Individual Retirement Account) is one of the more popular ways for you to build a retirement nest egg. Tax deferral is one of the reasons for its popularity.
Contributions to a traditional Individual Retirement Account may be deductible from your income, lowering the federal income tax for which you are responsible. Federal income tax on your IRA will be deferred until you begin taking withdrawals, usually when you have retired and may be in a lower tax bracket. Generally, you can qualify for a tax deduction if you are not an active participant in an employer-sponsored retirement plan.
For 2019, if you are an active participant in a retirement plan, your deduction for contributions to a traditional IRA will be reduced (and then phased out) if your modified adjusted gross income (MAGI) is:
2019 Phase out period for IRA
- Up to $122,000 for a full deduction; $122,000 – $137,000 for a partial deduction for a married couple filing a joint return or a qualifying widow(er).
- Up to 193,000 for a full deduction; partial deduction 193,000 – 203,000 for married filing jointly, or
- Less than $10,000 for a married individual filing a separate return
You must begin taking minimum annual withdrawals from your traditional IRA by April 1 of the year after the year you reach age 70 ½. Taxable withdrawals will be subject to ordinary income tax rates.
There are a number of options available to you when you open an IRA. You can use various investments depending on factors such as your time horizon, risk tolerance, and other financial goals. Talk to a financial professional to find out how you can take advantage of the tax benefits of a traditional Individual Retirement Account.
Contact Info for IRA agent:
Finally, click to be connected Michigan Insurance Agent or call 248-888-1134 to find out how you can start your plan today. For more information on other starting a Michigan Health Savings Account click the highlighted link.