Save money your way.
Whether you’re already participating in employer-sponsored retirement plans and want additional investment options, self-employed and want to actively save for retirement, or not saving and want to start, IRAs allow you to decide when and how much you save.
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Because these are individual retirement programs, you don’t have to enroll through an employer. If you ever change jobs, your money stays with you.
Make contributions on your own schedule, or roll over funds from another account.
Designate beneficiaries to ensure your money lives on.
Flexibility based on your income and how you want to receive funds in retirement.
If your income is above the limits for contributing to a Roth IRA, you can always contribute to a Traditional IRA. With a Roth IRA, you receive your funds tax-free, and with a Traditional IRA, your earnings grow tax-deferred until retirement.
A competitive, guaranteed return, with the potential for additional interest earnings (Good Experience Credits).
IRAs offer a guaranteed base interest rate of 3-6%, so they’re a safe and secure option for your investments. With this base rate, you won’t have to worry about your account losing value during market downturns. Pension Fund IRAs are also eligible for additional interest earnings through Good Experience Credits.
Curious to see how your funds could grow with an IRA?
* Base rate listed is the average of the quarterly base rates for the year. Good Experience Credits listed in the year it was received in accounts. Annualized return includes compounding. Data above represents historical data and may not be indicative of future performance.
Which IRA is right for me?
You’ve heard of Traditional IRAs and Roth IRAs — and Pension Fund offers both — but what are their real pros and cons?
In many ways, Traditional IRAs and Roth IRAs are similar: Both are individual retirement savings plans that are based on after-tax contributions. With both, you can designate beneficiaries. And, both of Pension Fund’s IRA programs receive a base rate of 3-6% and qualify for Good Experience Credits.
When choosing between the Roth and Traditional IRA, consider your income now and in retirement.
The Roth IRA is best for someone who:
Is relatively new in their career (tax rates are lower when income is lower)
Would like to withdraw retirement funds tax-free
Wishes to access funds earlier than retirement if necessary
Expects to be in the same or higher tax bracket in retirement
Has an income that doesn’t currently exceed Roth IRA income limits
The Traditional IRA is best for someone who:
Would like to save without income limits (i.e., high income earners)
Is looking for additional tax deductions on income
Plans to retire in a lower income bracket
Traditional vs. Roth IRA
The benefits of each IRA option vary based on your age, income and unique financial situation. Here we break down the differences between a Traditional IRA versus a Roth IRA to help you make the best decision based on your circumstances (with the help of your financial advisor).
|Traditional IRA||Roth IRA|
|Maximum Annual Contribution||For 2021, $6,000 ($7,000 if you reach age 50 or older during the year).||For 2021, $6,000 ($7,000 if you reach age 50 or older during the year).|
|Which Funds Can I Rollover Into My IRA?||Traditional IRA Pre-tax 403(b) account Pre-tax 401(k) account Pre-tax 457(b) account||Traditional IRA or Roth IRA, Pre-tax or Roth 403(b) account*, Pre-tax or Roth 401(k) account*, Pre-tax or Roth 457(b) account*.|
|Is there a Deadline for Contributions?||Contributions are due by the tax filing deadline for the year, without extensions (usually April 15).||Contributions are due by the tax filing deadline for the year, without extensions (usually April 15).|
|Is the Contribution Limit Reduced Based on My Income?||No.||Yes. The ability to contribute to a Roth IRA is reduced for higher-income earners. For 2020, you aren’t eligible to contribute to a Roth IRA if your modified adjusted gross income equals or exceeds: · $139,000 (filing single) · $206,000 (married filing jointly)|
|Are My Contributions Tax Deductible?||Yes. However, if you or your spouse is covered by an employer retirement plan (such as the Pension Plan or TDRA), the amount you may deduct is reduced based on your modified adjusted gross income (MAGI) and tax filing status. For 2021, if you’re covered by an employer retirement plan, you may not deduct your Traditional IRA contributions if your MAGI equals or exceeds: $76,000 (filing single) $125,000 (married filing jointly) Note: Even if you can’t deduct your contribution, you may still contribute to a Traditional IRA.||No. Contributions are made on an after-tax basis.|
|How Are My IRA Distributions Taxed?||Deductible contributions and earnings are included in your taxable income upon distribution. Non-deductible contributions are not taxed at distribution. A 10% early distribution tax may apply if you take a distribution before age 59½ unless an exception applies.||Contributions are not taxed upon distribution. Earnings on your contributions are not taxed upon distribution if certain holding requirements have been met. A 10% early distribution tax may apply to earnings if you take a distribution before age 59½ unless an exception applies.|
|Is There an Age Limitation for Making Contributions?|
No. Effective January 1, 2020, contributions may be made at any age so long as you have taxable compensation.
|No. Contributions may be made at any age as long as you have earned income.|
|When Do I Have to Begin Taking Distributions?||By April 1 of the calendar year following the year in which you reach age 72 (age 70½ if you reached age 70½ before January 1, 2020).||You do not have to begin taking distributions during your lifetime if you are the original owner or surviving spouse of the Roth IRA.|
* May be a taxable event. Please consult your tax advisor. The material contained in this chart is for informational purposes only and is not to be construed as tax, financial, or legal advice. View the IRS deductions limits.
Take advantage of potential tax benefits and flexible retirement savings options.
A tax-advantaged investment tool for your retirement savings.