|
Whether you are 25 or 55, you may be looking forward to retiring someday. If so you'll need to make sure that you have enough money saved to meet your needs. Your personal goals, plans, and timeframe make a difference in choosing the retirement solution that's right for you. That's why we encourage you to call, click, or come by Commerce today. We'll ask you questions, listen to learn about your situation, and present solutions that will help you meet your specific retirement savings goals.
Recent Changes in Tax Law for Roth IRAs
Recent changes in the Roth IRA make it even more attractive means to save for retirement.
Increased Contribution Limits: Starting in 2002, you may contribute up to $3,000 to your Roth IRA. The table below outlines how these limits continue to increase over the next few years:
|
Year
|
Contribution Limit
|
|
2002-2004
|
$3,000
|
|
2005-2007
|
$4,000
|
|
2008
|
$5,000
|
|
Beginning in 2009
|
$5,000 plus annual adjustments for inflation
|
Catch-up Contributions: Special "catch-up" provisions now allow people who turn age 50 before the end of the taxable year to contribute extra money to their IRAs.
|
Year
|
Annual Contribution Limit
|
Catch-up Contribution
|
Maximum Contribution
|
|
2002-2004
|
$3,000
|
$500
|
$3,500
|
|
2005
|
$4,000
|
$500
|
$4,500
|
|
2006-2007
|
$4,000
|
$1,000
|
$5,000
|
|
Beginning in 2008
|
$5,000
|
$1,000
|
$6,000
|
These catch-up payments may be made to a Roth IRA, if the Adjusted Gross Income limits are met for regular contributions for the year.
Note: The best course of action is to evaluate your situation in order to take full advantage of the provisions now becoming available. Consult a tax advisor regarding your personal situation and the possible state and federal benefits of each tax provision.
Roth IRA Basics
Unlike a traditional IRA, contributions to a Roth IRA are not tax-deductible, however, your earnings are tax-deferred and you may never pay taxes on your earnings provided you keep your money in the account a minimum of five years and meet one of the following conditions:
You reach the age of 59 1/2
You become disabled
You purchase your first home
You pass the account to your heirs upon death
Are You Eligible?
Because of its higher income limits, more people may invest in this tax-free investment plan. You maybe eligible for a Roth IRA if you file your taxes as:
A single individual with income of less than $95,000
A married couple with income less than $150,000
In both cases, you may contribute up to $4,000 a year to your Roth IRA. If your income is greater than $95,000 (for a single person) or $150,000 (for a married couple), you may still be eligible to contribute to a Roth IRA. Please consult with your tax advisor to determine the exact amount.
Your Conversion Option
If you are already investing in a Traditional IRA, converting to a Roth IRA may give you greater benefits in the long run. Come by and visit with a Commerce representative to see if conversion is right for you.
What are Your Next Steps?
Commerce Bank, N.A.
Commerce Brokerage Services, Inc.
If you prefer more choices and flexibility in your retirement savings, Commerce Brokerage Services* offers a wide variety of investment** choices for your IRA, including stocks, bonds, and mutual funds. To learn more, contact a Commerce Brokerage Services, Inc. investment specialist today:
- Call us at 816-243-2416 or 800-772-7283
- Click here to email Commerce Brokerage Services, Inc. at commercebrokerage@commercebank.com
- Come by and visit using our Broker Locator to find the investment specialist most convenient for you
* Commerce Brokerage Services, Inc., Member FINRA/SIPC, is a wholly owned subsidiary of Commerce Bank, N.A.
** Investment choices through Commerce Brokerage are NOT the same as savings or checking accounts offered through Commerce Bank N.A.. These investment choices, which include stocks, bonds and mutual funds and other investments are:
not insured by the FDIC;
not a deposit or other obligation of, or guaranteed by, Commerce Bank N.A.;
subject to investment risks, including possible loss of the principal amount invested.
|
