Interstate Life Retirement Plans can be used as Traditional and Roth IRAs.*
Here are some answers to commonly asked questions regarding the use of Traditional and Roth IRAs:
| Traditional | Roth | |
|---|---|---|
| How much can I contribute each year? | For 2018, $5,500 ($6,500 for ages 50+) |
For 2018, $5,500 ($6,500 for ages 50+) |
| What is the minimum income limit? | Earned income must be equal to or greater than your contribution. | Earned income must be equal to or greater than your contribution. |
| Are there age requirements? | No, you can contribute at any age. | Yes, you must be under age 70 1/2 to contribute. |
| When can I withdraw money? |
You can withdraw money at any time. | You can withdraw money at any time. |
| What are the tax rules for withdrawals? | Withdrawals of contributions are tax free. Withdrawals of earnings are tax free if you’re age 59 1/2 or older & the account is at least 5 years old. | Withdrawals of earnings & deductible contributions are taxed as ordinary income. |
| What is the penalty for early withdrawal(s)? | Withdrawals of contributions are always penalty free.There is a 10% federal penalty tax on withdrawals of earnings before age 59 1/2, unless an exception applies. | There is a 10% federal penalty tax on withdrawals of contributions or earnings before age 59 1/2, unless an exception applies. |
| Required minimum distributions? | No. | Yes, after age 70 1/2. |
| Are contributions tax-deductible? | No. | Yes, if you do not contribute to an employer-sponsored plan (i.e. 401(k), etc.). If you do contribute to an employer-sponsored plan, your deductions depend on your income. |
*Products vary by state. Please contact your Interstate Life representative or the Home Office to verify availability.