Are you concerned about saving enough for retirement? Interested in reducing your taxes? Looking for ways to save for education expenses? If you answered "yes" to any of these questions, now is the time to evaluate your retirement and investment portfolio.


Familiar to many investors, this IRA offers the opportunity for tax-deferred investments and growth for retirement and other financial needs.

Traditional IRAs are available to all investors with earned income at least equal to the amount contributed. Many investors who contribute to a Traditional IRA can deduct all or part of the maximum $4,000 contribution, plus a catch up amount of $1,000 for investors over age 50, from their current taxes. You may contribute to a Traditional IRA even if the contributions are not tax deductible.

An individual who is not an active participant in a company retirement plan, but whose spouse is an active participant, may make fully deductible contributions of up to $4,000 per year if the couple's modified adjusted gross income is less than $150,000. For couples above this income limit, the deduction for contributions is subject to a phase out.


A Roth IRA is an IRA for after-tax investments, with tax-free earnings and withdrawals for retirement and other important goals. Individuals are permitted to make all or a portion of their maximum $4,000 IRA contribution, plus a catch up amount of $1,000 to a Roth IRA. The maximum contribution is subject to a phase out for those individuals with modified adjusted gross income above a specified amount.

One of the principal advantages of a Roth IRA over a traditional IRA is that if earnings or gains are withdrawn after a five-year holding period, and certain other conditions are met, distributions from the Roth IRA will not be subject to federal income tax. The five-year holding period begins with the year for which a contribution is first made to a Roth IRA.


Traditional IRA investors may want to consider converting to a Roth IRA. Available to single or married investors filing jointly with adjusted gross incomes under $100,000, converting offers investors with Traditional IRAs the opportunity to take advantage of the tax-free growth available in the Roth IRA.

Converting to a Roth IRA may be right for you if:

• You have money separate from the IRA you can use to pay income taxes that will be due upon conversion.

• You do not want to take minimum distributions when you reach 70 1/2.

• You expect to be in the same tax bracket, or a higher one when you retire.

If you choose to convert a Traditional IRA to a Roth IRA, it is important to note that:

• The amount of money you convert will be included in your taxable income for the year in which you convert.


Rollover IRAs are Traditional IRAs established with distributions from qualified retirement plans. Rolling over gives people changing jobs, leaving a company, or entering retirement the potential to continue to grow their retirement plan assets on a tax-deferred basis. Rollover IRAs make sense for investors who are receiving lump-sum distributions from company retirement plans.


An education IRA is an IRA offering tax-free earnings and withdrawals for qualified higher education expenses.

You can set up an education IRA, which is a qualified trust or custodial account set up exclusively for paying the qualified higher education expenses of the beneficiary. Contributions to an education IRA can be made only in cash and cannot be made after the designated beneficiary reaches age 18. Annual contributions to education IRAs are limited to $2,000 per beneficiary, regardless of the number of accounts that might be held. The maximum contribution to an education IRA is subject to a phase out for those individuals with modified adjusted gross income above a specified amount.

For more complete information, see your OFG Financial Services, Inc. Representative.
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