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Use an IRA for supplemental retirement incomeAre you dreaming of a leisurely retirement? Maybe some traveling or a vacation home, but mostly the peace of mind that comes from a steady income during your retirement years? For many Americans though, that dream won't become a reality without some advance planning.One of the easiest ways to take charge of your future is to open an Individual Retirement Account (IRA). Anyone with earned income can invest in an IRA and contribute an amount up to their earned income of $5,000* per year—whichever is less. And, for some people, contributions to an IRA may be tax deductible. You can buy an IRA from a variety of financial institutions, but an IRA from a life insurance company can give you a unique feature you can’t get elsewhere—retirement income you can’t outlive and returns better than those available from banks. And, if you should die before receiving all of your IRA, its proceeds go into your estate. If you work, but your spouse doesn’t, you can open a "spousal" IRA and contribute up to $5,000 to your own IRA and up to $5,000 to your spouse’s. IRA contributions may also be tax deductible. This depends on two factors: the combined income of you and your spouse (if you file a joint tax return); and whether you participate in a company pension plan. And remember, if you are deducting your contributions, you have until April 15 to make contributions that apply to the previous tax year. But, be aware: An IRA is designed to provide retirement income, so the IRS will penalize you if you withdraw money before you reach age 59 1/2. An IRA is not a short-term savings account—it’s a supplemental plan that will ensure your retirement years are just what you hoped they’d be. For more information on IRAs and additional retirement planning options, contact your independent insurance agent.
* ‘Catch up’ contributions of $1,000/year available for taxpayers ages 50 and older.
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