Retirement Planning

Traditional IRAs

  • Maximum $6,000 for 2022 and $6,500 for 2023 (under age 50)
  • Maximum $7,000 for 2022 and $7,500 for 2023 (age 50 or older)
  • Contributions made prior to April 15 of the current year qualify as a prior year contribution 
  • Contributions are tax-deductible 
  • Account growth is tax-deferred 
  • If you are covered by a retirement plan at work, then your tax-deductible contribution to a Traditional IRA is phased-out if:
    1. Your filing status is married filing jointly, and your AGI is more than $109,000 but less than $129,000.
    2. Your filing status is single or head of household, and your AGI is more than $68,000 but less than $78,000.
    3. If your filing status is married filing separate returns, then your deductible phase-out starts at $10,000.
  • Distributions prior to age 59 1/2 may be subject to a federal penalty of 10%

Roth IRAs

  • Maximum $6,000 for 2022 and $6,500 for 2023 (under age 50)
  • Maximum $7,000 for 2022 and $7,500 for 2023 (age 50 or older)
  • Contributions made prior to April 15 of the current year qualify as a prior year contribution
  • Contributions are not tax deductible
  • Account growth is income tax-free
  • Phase-out (Adjusted Gross Income - AGI) for 2022
    • Single Taxpayer $129,000 - $144,000 
    • Married Taxpayer $204,000 - $214,000

Roth IRA Conversions

  • Individual Retirement Accounts (IRAs) may be converted into a Roth IRA without regard to your Adjusted Gross Income (AGI) beginning January 1, 2010 
  • Conversions from a Traditional IRA into a Roth IRA will incur income taxes 
     

Roth IRA Distribution Rules

Roth IRAs must held for at least five years and owner must be 59 1/2 or older.  Distributions used for the following purposes are not subject to penalties:

  • First Time Home Purchase (up to $10,000) 
  • Disability 
  • Death 
  • Medical Expenses 
  • Retirement

SEP IRAs (Simplified Employee Pension)

  • Available to independent contractors (you receive 1099s instead of W-2s)
  • Contractor may contribute the greater of 25% of net income from self-employment up to $61,000 for 2022 and $66,000 for 2023
  • Contributions are tax-deductible 
  • Account growth is tax-deferred  
  • Distributions prior to age 59 1/2 may be subject to penalties

Individual 401(k) Plan

  • Higher potential contribution limit than SEP IRA and profit-sharing plans
  • Ability to make profit-sharing contributions and salary deferrals
  • Tax-deductible contributions and tax-deferred earnings
  • Flexible annual contributions

Group 401(k) Plans

  • Maximum contribution of 100% of gross earnings up to $20,500 for 2022 and $22,500 for 2023
  • Contributions are made on a pre-tax basis 
  • Account growth is tax-deferred 
  • Distributions prior to age 59 1/2 may be subject to penalties

Contact us today at (818) 783-6620 to schedule a complimentary, no obligation conversation to learn more about how Kaplan Financial can help you pursue your financial goals. 

* Please talk to your tax advisor about your situation prior to executing any strategy.