Traditional IRAs

With a traditional IRA, any earnings on your retirement savings are tax-deferred. You don't pay income taxes on any growth in your account until you withdraw your money, giving you accelerated earning power.

Features Specific to Traditional IRAs

• Contributions – As long as you've earned income, you may contribute up until the tax year in which you reach age 70^½. You may also contribute for a non-wage-earning spouse. In 2012, you can contribute up to $5,000 per year, if you are age 50 and older by the end of the tax year, you can contribute an additional $1,000.
• Tax Benefits – You may be able to fully deduct your contributions on your tax returns (limits may apply if you or your spouse participates in an employer-sponsored plan). Any earnings are tax deferred, but you pay taxes at withdrawal.
• Distributions – Though it will always be subject to ordinary income tax, you may withdraw money at any time. However, if you withdraw money before you reach age 59^½, you may also incur an IRS 10% early distribution penalty unless an exception applies. Exceptions include:
  • First home purchase.
  • Education expenses.
  • Series of payments based on life expectancy (Substantially Equal Periodic Payments).
  • Eligible unreimbursed medical costs.
  • Total and permanent disability.
  • Payment of account assets upon your death.
  • Medical insurance premiums while unemployed.
  • IRS levy.

With traditional IRAs, you must begin taking withdrawals at age 70^½.

You may want to consider rolling over your assets from a qualified retirement plan, such as a 401(k), or consolidating multiple IRAs into your traditional IRA.

Take the Next Step

Want to learn more? Contact a Thrivent Financial representative today to learn how a traditional IRA may help you meet your retirement goals.

Thrivent Financial for Lutherans and its respective associates and employees cannot provide legal, accounting, or tax advice or services. Work with your Thrivent Financial representative, and as appropriate your attorney and/or tax professional for additional information.

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