An IRA can offer a great way to help build additional savings for retirement.
Even if you already contribute to an employer-sponsored retirement plan, you may be able to contribute to an IRA. If you can, it’s best to consider investing the maximum amount to both your employer-sponsored retirement plan and your IRA every year.
With the additional savings and careful investment strategies, you can potentially be better positioned to live comfortably in retirement.
When you invest in an IRA, your contributions and earnings have the opportunity to compound over time while potentially growing tax deferred (in the case of a Roth IRA, your withdrawals may be completely federal tax free, provided they meet certain criteria).
Since tax-deferred investments can help your money compound at an even faster rate than money in non-tax-advantaged investment vehicles, an IRA can potentially help you build additional funds for retirement.
If you have retirement assets in more than one IRA or employer plan — such as 403(b), 401(k) or 457(b) supplemental plans — you may want to consider consolidating this money by rolling it into a single IRA.1
Consolidating your savings with one provider can make it easier to manage your accounts and investment allocations, keep track of paperwork and potentially reduce the fees you pay.
With an IRA, you have options for generating income in retirement. You can take cash withdrawals to pay for unexpected expenses, set up a regular withdrawal schedule to help cover monthly expenses or plan to take your required minimum distributions.2
A TIAA-CREF IRA also offers you the ability to create a steady stream of income for either a lifetime or a guaranteed period of time.3
Evaluate IRA options at a glance, comparing the eligibility requirements, features and benefits of each.
1Prior to rolling over, consider your other options. You may be able to leave money in your current plan, withdraw cash or rollover the assets to your new employer’s plan if one is available and rollovers are permitted. Compare the differences in investment options, services, fees and expenses, withdrawal options, required minimum distributions, other plan features, and tax treatment. Speak with a TIAA-CREF Consultant and your tax advisor regarding your situation. Review your options.
2 Withdrawals of earnings from a retirement account are subject to ordinary income tax, plus a possible federal 10% penalty if you make a withdrawal before age 59 ½.
3 Available through guaranteed annuity products only. Guarantees are backed by the claims paying ability of the issuer.
*This chart assumes a hypothetical interest rate of 6% with no withdrawals during the period indicated. This calculation does not reflect the deduction of any taxes, fees or expenses and is not intended to predict or project an investment rate. If taxes and expenses were included, the performance would be lower. Actual returns will vary. This chart assumes that for those who are age 50 and under the maximum annual IRA contribution is $5,500 for 2015 and all subsequent years. These maximum contribution rates are based on current tax laws and are subject to change. This hypothetical illustration shows how three people — each under age 50 — end up with substantially different IRA accumulations, based on the amount of money they contribute each year. Gary contributes $2,000 per year to his IRA. Bill contributes $3,000 per year. And Diane makes the maximum contribution every year for those under age 50 ($5,500). As this chart shows, investing the maximum amount can add thousands of dollars to an IRA over a 30-year period.
TIAA-CREF Individual & Institutional Services, LLC, and its affiliates do not offer tax or legal advice services. Individuals should consult with a qualified independent tax advisor, CPA and/or attorney for specific advice based on the individual’s personal circumstances.
Investment, insurance and annuity products are not FDIC insured, are not bank guaranteed, are not bank deposits, are not insured by any federal government agency, are not a condition to any banking service or activity, and may lose value.
Advisory services are provided by Advice & Planning Services, a division of TIAA-CREF Individual & Institutional Services, LLC, a registered investment adviser.
TIAA-CREF Individual & Institutional Services, LLC, Teachers Personal Investors Services, Inc., and Nuveen Securities, LLC, Members FINRA and SIPC , distribute securities products. Annuity contracts and certificates are issued by Teachers Insurance and Annuity Association of America (TIAA) and College Retirement Equities Fund (CREF), New York, NY. Each is solely responsible for its own financial condition and contractual obligations.
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See how 3 people’s retirement contributions may grow over 30 years.
A Hypothetical Illustration*