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Are You Ready for Retirement?
Following are some of the most frequently asked questions about individual retirement accounts (IRAs) and retirement planning that we receive from our shareholders. Of course, if you have questions that are not answered in this article, please call an investment representative at 1-800-US-FUNDS or visit the retirement section of our website at www.usfunds.com. Q Who can contribute to an IRA? A Regular (also known as Traditional) IRA can be opened by anyone with earned income who is under age 70½. A Roth IRA can be opened by anyone with earned income, regardless of age, if their adjusted gross income is less than $110,000 (single filers) or $160,000 (joint filers). Q What is the difference between a Roth and a Regular IRA? The key difference between a Roth IRA and a Regular IRA is that contributions to a Roth IRA are never deductible and distributions after age 59½ are completely tax free if the Roth IRA has been opened 5 years. The Roth IRA is especially attractive for those who cannot deduct a contribution to a Regular IRA and who have put the maximum allowed into a 401(k) or other qualified plan. With a Roth IRA, even if you don’t meet the five year and age 59½ requirement for tax-free distributions, you can withdraw your contributions tax free and penalty free at any time. You pay taxes and early withdrawal penalties only on distributions (earnings) in excess of your contributions. Q How much can I contribute to an IRA? The maximum contribution per year to either a Regular or a Roth IRA is $2,000 or 100% of your earned income, whichever is less. Q Can I invest in both a Regular and a Roth IRA? Yes, as long as the total amount of your contributions does not exceed $2,000 per year. For example, you could invest $1,500 in a Regular IRA and $500 in a Roth IRA. Q How much money do I need to open either a Regular or a Roth IRA? There is no minimum investment amount necessary to open an IRA at U.S. Global Investors. You can also sign up for our ABC Investment Plan,® a dollar-cost averaging strategy that allows you to build a position in a fund by investing a set amount on a regular basis.* Of course, no investment plan can guarantee a profit or protect against depreciation in a declining market. Q My spouse does not work. Can she/he open an IRA? Absolutely. A non-working spouse is eligible to open either a Regular or Roth IRA with a maximum contribution of $2,000 per year. Q I am self-employed. What are my retirement plan options? If you are self-employed or own your own business, there are several options that you have to maximize your retirement planning strategy. Please call 1-800-US-FUNDS and an investment representative can help you select the retirement plan options that will help you meet your financial and retirement planning goals. Q How do I know if I am saving enough for retirement? For a quick analysis of how much you need to save to reach your retirement goals, visit www.usfunds.com and complete our retirement planning worksheets. You can also use our on-line asset allocation tool for help in selecting an asset mix that meets your personal financial goals and needs. *You should evaluate your ability to continue in such a program in view of the possibility that you may have to redeem fund shares in periods of declining share prices as well as periods of rising prices. |
