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Traditional and Roth IRAs |
| Types of IRAs Basics of Traditional IRAs
Basics of Roth IRAs
Deciding Between a Traditional and a Roth IRA
Recent Changes
to Traditional and Roth IRAs
Get Started with a Westcore IRA |
 Establishing an Individual
Retirement Account (IRA) is one of the most important steps you can take toward planning
for a financially secure future. By making regular contributions to your IRA, you can
create a nest egg for retirement while putting your assets to work on a tax-sheltered
basis.
Types of IRAs |
| Westcore offers two types of IRAs: Traditional IRAs and Roth
IRAs. For more in-depth information, download or request our IRA Information Booklet or call a
Westcore Investor Service Representative at 1-800-392-CORE (2673).
Please be sure to consult your tax adviser for advice on which IRA fits your needs. |
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Basics of Traditional IRAs |
| With a Traditional IRA, you can contribute up to $4,000
per year and you may be able to deduct the contribution
from taxable income, depending on your personal situation.
Federal income taxation of investment growth and dividends
is deferred until the money is withdrawn. Withdrawals are
taxed as additional ordinary income when received. Non-deductible
contributions, if any, are withdrawn tax-free. Withdrawals
of deductible contributions or dividends before age 59 1/2
are assessed a 10% penalty in addition to income taxes,
unless an exception applies. |
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Basics of Roth IRAs |
| If you are not eligible to deduct your IRA contributions
to a Traditional IRA, you may want to consider whether you are eligible for a Roth IRA.
With a Roth IRA, the annual contribution limits are essentially the same as for a
Traditional IRA, but contributions are not deductible. All dividends and investment growth
in the account accumulate tax-free. Most important, with a Roth IRA, there is no
federal income tax on qualified withdrawals! Also, unlike with a Traditional IRA, you
can continue to contribute to your Roth IRA after reaching age 70 1/2 as long as you have
earned income and there is no requirement that you begin taking withdrawals at that time. |
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Deciding Between a Traditional and a Roth IRA – should you take the tax benefit at the beginning or end? |
| Each IRA offers more than just tax-deductibility –
and which is right for you depends on your personal situation. Traditional IRAs offer the advantage of tax-deductibility.
You may be eligible to deduct the amount of your contribution each year from your federal
income taxes, depending upon your income and whether you participate in an
employer-sponsored retirement plan, such as a 401(k) plan. In other words, you realize tax
savings up front.
Roth IRAs offer you a tax-break when you begin
making qualified withdrawals. Qualified withdrawals are tax-free, giving you a
break at the end of the life of your account. And with a Roth IRA, there
is no prohibition on making contributions after turning age 70 1/2, and
there’s no requirement that you begin making minimum withdrawals at that age.
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Recent
Changes to Traditional and Roth IRAs |
Did
you know that starting in 2002 you can contribute more to your IRA?
Recent changes to the laws governing IRAs increased annual contribution
limits considerably. This increase offers you the opportunity to put more of
your assets to work on a tax-sheltered basis each year.
Click
here to find out more about these recent changes.
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| This information should not be construed as investment or tax advice.
Investors must consider their own situation before making an investment decision.
An investor should consider
investment objectives, risks, charges and expenses of
the Fund(s) carefully before investing. Click here for
a prospectus,
which contains this and other important information. Please
read the prospectus carefully before investing.
Westcore Funds are
distributed by ALPS Distributors, Inc. |
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