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Little girl being taught how to ride a bicycle by her grandfather at the park
Little girl being taught how to ride a bicycle by her grandfather at the park
Little girl being taught how to ride a bicycle by her grandfather at the park
Little girl being taught how to ride a bicycle by her grandfather at the park
Little girl being taught how to ride a bicycle by her grandfather at the park
Little girl being taught how to ride a bicycle by her grandfather at the park
Little girl being taught how to ride a bicycle by her grandfather at the park
Start saving now for established financial stability later.

Retirement

At some point, we all stop working and retire. While this may feel far away, it's not too early to start planning your financial future. Unfortunately, most Americans aren't as prepared as they should be for retirement. If you're thinking about starting to save, then an Individual Retirement Account, or IRA, may be right for you.*

Nearing Retirement

You've worked hard to earn what you have, and we want to help you make the most of it. If your next chapter in life is enjoying retirement, an IRA, which is subject to special tax advantages, helps you build savings more effectively. You can move your funds into CDs, money market, or savings, all of which can be set up as IRA accounts in either Roth or Traditional plans.

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What is an IRA?

An IRA is known as an Individual Retirement Account. This account falls under the category of retirement, so it has specific federal laws that apply, but otherwise functions similar to your personal accounts. Depending on the IRA plan type that you choose, Traditional or Roth, you can earn money in your WaFd IRA from compound interest each year. Regardless of the plan type you choose, money in your retirement account is not taxed while the money stays in an IRA plan. WaFd Bank offers certificates of deposit, savings, and money market account IRAs.

I'd like to open an IRA. What are my options?

WaFd Bank offers two types of IRAs, Roth and Traditional. The main difference is the way they are taxed. When you open a Roth IRA, taxes are paid before putting money into the account, so you don't have to pay taxes when you withdraw your money in retirement. On the other hand, when you put money into a Traditional IRA you do not pay taxes. Instead, when you reach retirement and begin to withdraw your money, you'll pay taxes at the time of your withdrawal.

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Exploring Your IRA OptionRoth IRATraditional IRA
Can I contribute?You are eligible to contribute if you earn compensation (or file a joint tax return with a spouse who earns compensation) and your modified adjusted gross income (MAGI) is less than or within the defined limits. More information about MAGI limits is available on the IRS website.You are eligible to contribute at any age if you earn compensation (or file a joint return with a spouse who earns compensation).
Can I take an income tax deduction for my contribution?No. Roth IRA contributions are not tax-deductible.It depends on your marital and tax-filing status, your MAGI, and whether you or your spouse actively participates in an employer-sponsored retirement plan. If neither you nor your spouse is an active participant, then you are eligible to deduct your full contribution.
What are the benefits?
  • You may qualify for a saver's tax credit of up to $1,000 when you make a contribution.
  • Because all Roth IRA contributions must be included in your taxable income, and therefore are not tax-deductible, you can withdraw your contributions at any time, tax- and penalty-free.
  • Any earnings generated within the IRA are tax-deferred (you do not pay tax on the earnings until you withdraw them.)
  • If you satisfy the qualified distribution requirements, you can withdraw the earnings tax-free, which is the ultimate advantage of having a Roth IRA.
  • You are never required to take money out of your Roth IRA, no matter what your age.
  • Restrictions may apply.
  • You may qualify for a saver's tax credit of up to $1,000 when you make a contribution.
  • Any earnings generated within the IRA are tax-deferred (you do not pay tax on the earnings until you withdraw them).
  • If your Traditional IRA contributions are tax-deductible and therefore tax-deferred, you do not pay taxes on them until you withdraw the money.
  • Any after-tax amounts (nondeductible contributions) within your IRA can be withdrawn tax- and penalty-free.
Will I ever be required to withdraw the money?No. Roth IRA owners are never required to take distributions. After your death, however, your beneficiaries may be subject to required distributions.Yes. Traditional IRA owners are required to take annual minimum distributions beginning for the year they turn age 73 years. Your beneficiaries may also will be subject to required distributions.
Roth IRA
Can I contribute?You are eligible to contribute if you earn compensation (or file a joint tax return with a spouse who earns compensation) and your modified adjusted gross income (MAGI) is less than or within the defined limits. More information about MAGI limits is available on theIRS website.
Can I take an income tax deduction for my contribution? No. Roth IRA contributions are not tax-deductible.
What are the benefits?
  • You may qualify for a saver's tax credit of up to $1,000 when you make a contribution.
  • Because all Roth IRA contributions must be included in your taxable income, and therefore are not tax-deductible, you can withdraw your contributions at any time, tax- and penalty-free.
  • Any earnings generated within the IRA are tax-deferred (you do not pay tax on the earnings until you withdraw them.)
  • If you satisfy the qualified distribution requirements, you can withdraw the earnings tax-free, which is the ultimate advantage of having a Roth IRA.
  • You are never required to take money out of your Roth IRA, no matter what your age.
  • Restrictions may apply.
Will I ever be required to withdraw the money?No. Roth IRA owners are never required to take distributions. After your death, however, your beneficiaries may be subject to required distributions.
Traditional IRA
Can I contribute?You are eligible to contribute if you are under age 70 years and 6 months and earn compensation (or file a joint return with a spouse who earns compensation).
Can I take an income tax deduction for my contribution?It depends on your marital and tax-filing status, your MAGI, and whether you or your spouse actively participates in an employer-sponsored retirement plan. If neither you nor your spouse is an active participant, then you are eligible to deduct your full contribution.
What are the benefits?
  • You may qualify for a saver's tax credit of up to $1,000 when you make a contribution.
  • Any earnings generated within the IRA are tax-deferred (you do not pay tax on the earnings until you withdraw them).
  • If your Traditional IRA contributions are tax-deductible and therefore tax-deferred, you do not pay taxes on them until you withdraw the money.
  • Any after-tax amounts (nondeductible contributions) within your IRA can be withdrawn tax- and penalty-free.
Will I ever be required to withdraw the money?Yes. Traditional IRA owners are required to take annual minimum distributions beginning for the year they turn age 70 years and 6 months. Your beneficiaries also will be subject to required distributions.

Living in Retirement

Your hard work has allowed you to enjoy the retirement chapter of your life. Now more than ever, it's important to make the most of your money so you can continue to enjoy what you've earned. We've got some ideas to help.* Plus, at WaFd Bank, we offer no-fee IRA rollovers and transfers.

Rolling over your IRA for a better retirement

Rolling over retirement plan assets to another retirement plan or an IRA will not only preserve your tax benefits, but may possibly provide you with additional benefits.

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When You Can Roll It Out

Employee-sponsored retirement plans have “triggering events” that dictate when you may withdraw the money from your account, such as attainment of retirement age, termination of employment, disability, or death.

Next, you must ensure that the amount you are taking is eligible to be rolled over. Most distributions from retirement plans are eligible to be rolled over to IRAs or other eligible retirement plans, but some are not.

Talk to your employer about your options on either of the above.

What can I roll over to a Traditional IRA?
  • Qualified Retirement Plans such as 401(k) Plans
  • Federal Thrift Savings Plans
  • 403(b) Plans
  • Governmental 457(b) plans
  • Simple IRA Plans
What can I roll over to a Roth IRA?
  • Qualified Retirement Plans such as 401(k) Plans
  • Federal Thrift Savings Plans
  • 403(b) Plans
  • Governmental 457(b) plans
  • Designated Roth Plan Accounts**

*Please consult with a tax professional to determine which options meet your financial goals.
**Pretax assets rolled over from a retirement plan to a Roth IRA must be included in taxable income in the year of distribution.

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For more information about our account services, or to talk to our Client Care Directors.