Envisioning Your Retirement_Flipbook_2023

More than 3 in 10 American households own at least one traditional IRA. About 1 out of 4 own at least one Roth IRA. Many households own both. Source: Investment Company Institute, 2023 (2022 data) Withdrawals from either type of IRA prior to age 59½ may be subject to a 10% income tax penalty, with certain exceptions. No age restrictions, but you must have earned income (from wages) to contribute to a traditional IRA. No age restrictions, but you must have earned income (from wages) to contribute to a Roth IRA. No income eligibility phaseouts except those discussed below regarding deductibility of contributions. Income eligibility phaseouts to contribute to a Roth: $138,000–$153,000 for single filers in 2023 $218,000–$228,000 for joint filers in 2023 Contributions are generally tax deductible. But if you are an active participant in an employer-sponsored retirement plan, the deduction is phased out at higher income levels: $73,000–$83,000 for single filers and $116,000–$136,000 for married joint filers in 2023. Contributions to a Roth IRA are not tax deductible. Because they are made with after-tax dollars, your contributions can be withdrawn tax-free and penalty-free at any time, for any reason. Distributions are taxed as ordinary income. Qualified distributions of earnings after age 59½ and meeting the five-year holding requirement are tax-free. You must begin taking required minimum distributions starting in the year you turn age 73 (for those who reach age 72 after December 31, 2022). If you are the original Roth IRA owner, you are not subject to required minimum distributions. Traditional IRA Roth IRA