Personal Traditional IRA
A traditional IRA (Individual Retirement Account) is one of the most popular ways to save for retirement. Below are some of the key features to help you determine if a traditional IRA might be the right choice for you:
- Features tax-deferred earnings until withdrawn (at which time any distribution will be taxed at your current rate for the year of withdrawal)
- Offers investment flexibility
- Your income levels exceed the threshold for Roth IRA contribution
- Expectation of lower income tax bracket after retirement
- Interested in increased savings for retirement
- May lower your current income tax liability with deductible contribution (see limits below)
Eligibility Requirements
A traditional IRA is available to anyone with earned income for the current tax year. A non-working spouse may also be able to contribute if certain conditions are met. Please seek advice from a tax advisor to determine if a non-working spouse is eligible to open or contribute to an IRA.
Consult your Frost wealth advisor for more details.
Contribution Deadlines and Limits
The maximum annual contribution to a traditional IRA is the lesser of $6,500 for tax year 2023 and $7,000 for tax year 2024 or 100% of compensation. For those individuals who are 50 or older at the end of the tax year, an additional annual "catch-up" contribution of $1,000 may be made. If eligible, you may open or contribute to an existing IRA for the tax year 2023 up until Apr. 15, 2024.
Deductibility Requirements
Tax-deductible traditional IRA contributions are subject to an income phase-out rule. This means that starting at a certain level of Adjusted Gross Income, or AGI, your ability to take a tax deduction is phased-out.
2023 (and 2024) Traditional IRA AGI Deduction Limits
(If Covered by a Retirement Plan at Work)
| Filing Status | Full Deduction |
Partial Deduction |
No Deduction |
|---|---|---|---|
| Single, head of household |
$73,000 or less for 2023 $77,000 or less for 2024 |
$73,000 - $83,000 for 2023 $77,000 - $87,000 for 2024 |
$83,000 or more for 2023 $87,000 or more for 2024 |
| Married filing jointly |
$116,000 or less for 2023 $123,000 or less for 2024 |
$116,000 - $136,000 for 2023 $123,000 - $143,000 for 2024 |
$136,000 or more for 2023 $143,000 or more for 2024 |
| Married filing separately | No deductible available | Less than $10,000 | $10,000 or more for 2023 $10,000 or more for 2024 |
Distributions
Required minimum distributions must begin by Apr. 1 following the year you turn:
- 72 if you turned 70½ on or after Jan. 1, 2020
- 73 if you turned 72 on or after Jan. 1, 2023
For all subsequent years, including the year in which the first distribution was paid by Apr. 1, the RMD must occur by Dec. 31.
You may be charged a 10% IRS early withdrawal fee if you withdraw earnings before the age of 59½.
Consult your Frost wealth advisor for more details.
2023 (and 2024) Traditional IRA AGI Deduction Limits
(If NOT Covered by a Retirement Plan at Work)
| Filing Status |
Full Deduction |
Partial Deduction |
No Deduction |
|---|---|---|---|
| Single, head of household | No limit | No limit | No limit |
| Married filing jointly (spouse not covered) | No limit | No limit | No limit |
| Married filing jointly (spouse covered) |
$218,000 or less for 2023 $230,000 or less for 2024 |
$218,000 - $228,000 for 2023 $230,000 - $240,000 for 2024 |
$228,000 or more for 2023 $240,000 or more for 2024 |
| Married filing separately (spouse covered) | No deduction available | Less than $10,000 | $10,000 or more |
Investment Options
You have various options for investing in a traditional IRA:
- Mutual funds
- Stocks
- Bonds
- Annuities
Contact one of our Frost wealth advisors by calling 1-800-437-5107 for more details.
Existing IRA Transfer
Do you have an existing IRA you would like to transfer to Frost? There are a few simple steps to get your IRA balance transferred:
- Contact a Frost wealth advisor at 1-800-437-5107
- Provide your non-Frost IRA account information to Frost
- A Frost wealth advisor will assist in the completion of documentation necessary for transfer
- Frost will request the transfer directly from your prior institution
Transfers can take two to six weeks depending on the assets being transferred.
Recently inherited a qualified plan balance or IRA? Frost can help assist you through this difficult transitional time by opening an inherited IRA for your benefit. Contact a Frost wealth advisor at 1-800-437-5107 for more information.