IRA Plans


A traditional IRA is a tax-deferred retirement savings account. You make after-tax contributions. Later you pay taxes on only your any dividends, interest gains or capital gains when you make withdrawals in retirement. Deferring taxes means all of your dividends, interest payments and capital gains can compound each year without taxes.

How it works

An IRA is an investment account, created in 1974 under the Employee Retirement Income Security Act (ERISA). Once you start saving money in an IRA, you can invest in stocks, bonds, mutual funds, ETFs, and other types of assets. You can buy and sell investments within the IRA. However, if you withdraw assets before the age at 59 ½ (known as a premature distribution), you will most likely pay a 10 % IRS penalty fee. You also may be subject to federal, state and local income taxes.

Each year you may contribute up to the lesser of your earned income for that year, or the amount set by the IRS. The maximum you can contribute is based on whether you are age 49 or younger or age 50 or older for traditional and Roth IRA’s. Contributions can be made through April 15 for the prior calendar year.

If you qualify, your contributions to an IRA may be deductible. To see if you qualify for a deductible IRA, consult your Focus Financial representative and use the following guidelines:

  • If you have a 403(b) or another retirement plan at work, you may fully or partially deduct your contribution only if your adjusted gross income (AGI) qualifies. The IRS phases out deductions for singles earning more than $73,000 or couples earning more than $121,000 in 2018, and subject to change in future calendar years.
  •  If you’re not covered by a retirement plan, but your spouse is, you may qualify for a full or partial deduction if you file jointly and your AGI is below $199,000 for the 2018 tax year. (The same rule applies if you’re a nonworking spouse of someone covered by a retirement plan at work.)

If you’re not eligible to contribute to an IRA, you may be eligible to contribute to a Roth IRA. You will qualify if your AGI is below $135,000, if you’re single or $193,000 if you’re married and filing jointly in 2018. These amounts are subject to change in future calendar years. If you are 50 or older, the maximum IRA contribution limit for 2018 is $6,500; otherwise, the maximum is $5,500.

What types of investment choices are available?

A Focus Financial advisor can help you choose investments that best meet your financial objectives, based on your personal investment objectives and risk tolerance. You should consider the investment objectives, risks, and charges and expenses of the funds offered carefully before investing.

Benefits of a Traditional IRA

They are:

  • Tax-deferred growth
  • Contributions may be tax deductible
  • IRA account value protection from creditors
  • You can use the IRA as collateral when borrowing

If you would like more information about a 403(b) plan, please call Focus Financial at (918) 266-2787 or fill out the form below: