A Traditional IRA (Individual Retirement Account) is one of the most popular ways to save for retirement. Below are some of the key features to help you determine if a Traditional IRA might be the right choice for you:

  • Features tax-deferred earnings until withdrawn (after age 59 ½, at which time earnings are taxed at your current rate at the time of withdrawal)
  • Offers investment flexibility
  • Your income levels exceed the threshold for Roth IRA contribution
  • Expectation of lower income tax bracket after retirement
  • Interested in increased savings for retirement
  • May lower your current income tax liability with deductible contribution (see limits below)


Eligibility Requirements

A Traditional IRA is available to:
  • anyone under age 70½ who has earned income
  • a non-working spouse may also be able to contribute if certain conditions are met.

Consult your Frost Wealth Advisor for more details.

Contribution Deadline and Limits

The maximum annual contribution to a Traditional IRA is the lesser of $5,500 for tax year 2016 or 100% of compensation. For those individuals who are 50 or older at the end of the tax year, an additional annual "catch-up" contribution of $1,000 may be made. If eligible, you may open or contribute to an existing IRA for the tax year 2015 up until April 18, 2016.


Distributions

Required minimum distributions must begin by April
1 following the year an individual turns age 70½. For all subsequent years, including the year in which the first distribution was paid by April 1, the required minimum distribution must occur by December 31. You may be charged a 10% IRS early withdrawal fee if you withdraw earnings before the age of 59½.

Investment Options

You have various options for investing in a Traditional IRA:
  • mutual funds
  • stocks
  • bonds
  • annuities

Contact one of our Frost Wealth Advisors by calling (888) 268-9202 for more details.

​Existing IRA Transfer

Do you have an existing IRA you would like to transfer to Frost? There are a few simple steps to get your IRA balance transferred:

  1. ​Contact a Frost Wealth Advisor at (888) 268-9202
  2. Provide your non-Frost IRA account information to Frost
  3. A Frost Wealth Advisor will assist in the completion of documentation necessary for transfer
  4. Frost will request the transfer directly from your prior institution

Transfers can take two to six weeks depending on the assets being transferred.

Recently inherited a qualified plan balance or IRA?  Frost can help assist you through this difficult transitional time by opening an inherited IRA for your benefit.  Contact a Frost Wealth Advisor at (888) 268-9202 for more information.



Deductibility Requirements

Tax-deductible traditional IRA contributions are subject to an income phase-out rule. This means that starting at a certain level of Adjusted Gross Income, or AGI, your ability to take a tax deduction is phased-out.

2016 Traditional IRA AGI Deduction Limits
(If Covered by a Retirement Plan at Work)

​Filing
Status
Full Deduction​ Phase-Out​ No Deduction​
Single,
head of household​
$61,000
or less​
$61,000 - $71,000​ $71,000
or more​
Married filing jointly​ $98,000
or less​
$98,000 - $118,000​ $118,000
or more​
Married filing separately​ ​Less than $10,000 ​$10,000
or more

 

2016 Traditional IRA AGI Deduction Limits
(If NOT Covered by a Retirement Plan at Work)
 

​Filing
Status
Full Deduction​ Phase-Out​ No Deduction​
Single, head of household​ No limit​ ​No limit ​No limit
Married filing jointly (spouse not covered)​ ​No limit ​No limit ​No limit
Married filing jointly (spouse covered)​ ​$184,000
or less
​$184,000 - $194,000 ​$194,000
or more
Married filing separately (spouse covered)​ Less than $10,000​ ​$10,000
or more
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