Self-Directed Traditional IRA - Hilliard Lyons

3
hilliard.com J.J.B. Hilliard, W.L. Lyons, LLC | Member NYSE, FINRA, & SIPC hilliard.com Contact your Wealth Advisor for more details. This document answers some of the most frequently asked Traditional IRA questions and will give you insight into a Hilliard Lyons Self-Directed Traditional IRA. Your Hilliard Lyons Wealth Advisor will provide you with ideas for your Traditional IRA and details on establishing an account. Establishing a Traditional IRA Q: Who is eligible for a Traditional IRA? A: Everyone who is under the age of 70½ and receives earned income in the form of salary, fees, bonuses, commissions or alimony. Q: I participate in a retirement plan through my employer. Do I still qualify to make a Traditional IRA contribution? A: Yes. You can still contribute annually to a Traditional IRA. However, a full tax deduction may not be available, depending on your: Active participation in an employer-sponsored retirement plan Modified adjusted gross income Tax filing status In prior years, you may have had some or all of your deductible Traditional IRA contributions phased out if you (or your spouse) participated in an employer-sponsored retirement plan, and you had adjusted gross income above a certain amount. Today, if you are actively participating in an employer-sponsored plan and your spouse is not, your spouse may make a fully deductible Traditional IRA contribution as long as your joint MAGI does not exceed $189,000 for 2018. The deduction is completely phased out with MAGI of $199,000. This is known as the “spousal de-link.” Self-Directed Traditional IRA

Transcript of Self-Directed Traditional IRA - Hilliard Lyons

Page 1: Self-Directed Traditional IRA - Hilliard Lyons

hilliard.comJ.J.B. Hilliard, W.L. Lyons, LLC | Member NYSE, FINRA, & SIPC

hilliard.com

Contact your Wealth Advisor for more details.

This document answers some of the most frequently asked Traditional IRA questions and will give you insight into a Hilliard Lyons Self-Directed Traditional IRA. Your Hilliard Lyons Wealth Advisor will provide you with ideas for your Traditional IRA and details on establishing an account.

Establishing a Traditional IRA

Q :  Who is eligible for a Traditional IRA?

A: �� �Everyone�who�is�under�the�age�of�70½�and�receives�earned�income�in�the�form�of�salary,� fees,�bonuses,�commissions�or�alimony.

Q : �� �I�participate�in�a�retirement�plan�through�my�employer.�Do�I�still�qualify�to�make�a�Traditional�IRA�contribution?

A:� �Yes.�You�can�still�contribute�annually�to�a�Traditional�IRA.�However,�a�full�tax�deduction�may�not�be�available,�depending�on�your:

■ Active�participation�in�an�employer-sponsored�retirement�plan�

■ Modified�adjusted�gross�income

■ Tax�filing�status

� �� �In�prior�years,�you�may�have�had�some�or�all�of�your�deductible�Traditional�IRA�contributions�phased�out�if�you�(or�your�spouse)�participated�in�an�employer-sponsored�retirement�plan,�and�you�had�adjusted�gross�income�above�a�certain�amount.�Today,�if�you�are�actively�participating�in�an�employer-sponsored�plan�and�your�spouse�is�not,�your�spouse�may�make�a�fully�deductible�Traditional�IRA�contribution�as�long�as�your�joint�MAGI�does�not�exceed�$189,000�for�2018.�The�deduction�is�completely�phased�out�with�MAGI�of�$199,000.� This�is�known�as�the�“spousal�de-link.”

Self-Directed Traditional IRA

Page 2: Self-Directed Traditional IRA - Hilliard Lyons

hilliard.comJ.J.B. Hilliard, W.L. Lyons, LLC | Member NYSE, FINRA, & SIPC

hilliard.com

Self-Directed Traditional IRA

IRA Deductibility Thresholds Expanded*

Single Married2018 >$63k - <$73k >$101k - <$121k

*For�individuals�and�married�couples�filing�jointly�who�are�active�participants�in�an�employer�sponsored�retirement�plan.

Q :  �What�are�my�potential�tax�advantages�with�a�Traditional�IRA?

A:� �Contributions�are�tax�deductible�from�your�gross�income,�if�you�qualify.�Regardless�of�the�tax�deductibility�of� your�contribution,�all�taxes�are�deferred�on�all�investment�gains,�dividends�and�interest�until�withdrawn.

Contributing to Your Traditional IRA

Q : ��How�much�can�I�contribute�each�year?�

A:� �For�2016,�you�can�contribute�and�deduct,�if�you�qualify,�$5,500**�or�100%�of�compensation,�whichever�is�less.�Married�couples�can�contribute�a�total�of�$11,000� ($5,500�to�each�in�separate�accounts).

Q : ��What�if�I�work�only�part�time?

A:� �You�can�contribute�up�to�100%�of�your�earned�income� up�to�$5,500.** **Contribution�limit�is�increased�to�$6,500�for�individuals�50�or�older.

Q : �� �Can�I�have�a�Traditional�IRA�if�my�only�source�of�income�is�from�investments?

A:� �No.�You�are�eligible�to�make�contributions�only�if�you�have�earned�income�from�salary,�fees,�bonuses,�commissions�or�alimony.

Q :  When�are�my�contributions�due?

A: ��Contributions�may�be�made�at�the�start�of�the�tax�year,�Jan.�1,�if�you�wish.�An�early�contribution�allows�you�to�take�full�advantage�of�tax�deferral�and�compounding�of�tax-deferred�earnings.�You�must�make�your�contribution�no�later�than�April�15�of�the�following�year.

Q : ��Must�I�contribute�to�my�Traditional�IRA�each�year?

A:  � �No.�Annual�contributions�are�voluntary.�If�you�skip�a� year�or�do�not�wish�to�make�the�maximum�contribution� in�any�year,�you�cannot�contribute�more�than�the� annual�maximum�to�catch�up.

Q : ��Must�I�contribute�only�cash?

A:�� �Yes,�unless�you�are�establishing�a�rollover�Traditional�IRA�with�investments�from�a�former�employer’s�retirement�program,�or�consolidating�the�assets�of�other�IRAs.

Q : �� �Can�I�include�alimony�payments�when�determining�allowable�contributions?

A:�� �Yes.�Alimony�will�qualify�as�compensation�for�calculating�contributions.

Q :  � �My�spouse�is�not�employed.�Can�she/he�participate?

A:� �Yes.�You�may�open�a�Traditional�IRA�for�your�unemployed�spouse�who�is�under�age�70½.�The�maximum�contribution�to�the�account�is�the�lesser�of�$5,500�or 100%�of�the�working�spouse’s�compensation.�The�maximum�allowable�annual�contribution�for�a�married�couple�is�$11,000�($5,500�each�in�separate�accounts).

Q : �� �My�spouse�has�limited�income�of�less�than�$250�per�year.�Can�he/she�still�qualify�for�a�spousal�Traditional�IRA?

Page 3: Self-Directed Traditional IRA - Hilliard Lyons

hilliard.comJ.J.B. Hilliard, W.L. Lyons, LLC | Member NYSE, FINRA, & SIPC

hilliard.com

Self-Directed Traditional IRA

A:� �Yes.�However,�your�spouse�must�choose�to�be�treated� as�having�no�income�during�the�tax�year.

Hilliard Lyons Self-Directed Traditional IRA

Q : �� �What�investments�can�I�make�in�Hilliard�Lyons� Self-Directed�Traditional�IRA?

A:� �A�significant�advantage�of�a�Hilliard�Lyons�Self-Directed�Traditional�IRA�is�flexibility.�Depending�on�your�investment�objectives,�you�may�choose�to�invest�in�stocks,�bonds,�U.S.�Government�securities�and�mutual�funds.�In�addition,�you�may�write�covered�call�options�and�buy�put�options�to�protect�existing�stock�positions.�Your�Hilliard�Lyons�Wealth�Advisor�offers�up-to-date�research�information.� You�may�trade�in�the�Hilliard�Lyons�Self-Directed�Traditional�IRA�account,�as�you�would�in�a�regular�account,�with� no�limit�on�the�number�of�buys�or�sells�made�in�any� time�period.

Q : �� �Does�Hilliard�Lyons�manage�my�Self-Directed�Traditional�IRA?

A:� �No.�As�owner�of�the�account,�you�manage�it.�Hilliard�Lyons�helps�by�providing�research�information�and�keeping�custody�of�the�securities.�Annual�reports�will�be�provided�showing�contributions�and�withdrawals.�However,�you�make�any�decisions�to�buy�or�sell�securities.

For Additional Help

This�piece�is�a�general�discussion�of�the�Traditional�Individual�Retirement�Account.�For�more�information,�please�consult�your�tax�advisor.�Your�Hilliard�Lyons�Wealth�Advisor�will�be�pleased�to�make�an�appointment�to�discuss�any�questions�you�may�have�regarding�specific�investments.

Securities�and�advisory�services�offered�through�J.J.B.�Hilliard,�W.L.�Lyons,��LLC,�a�registered�investment�advisor�and�broker�dealer.�Member�NYSE,�FINRA�&�SIPC.��Investing�in�securities�involves�risk,�including�possible�loss�of�principal.�©2018.�All�rights�reserved.