Retirement Accounts

It's easy to put off planning for retirement, especially if the event is many years away. But the earlier you start planning, the longer and more enjoyable your retirement may be. Through a selection of Individual Retirement Accounts (IRAs), Simplified Employee Pension (SEPs), and Saving Incentive Match Plan for Employees (SIMPLE) plans with Wachovia Securities, you can choose a plan that can help meet your retirement needs while investing in stocks, bonds, mutual funds, money markets or government securities.

A Wachovia Securities Financial Advisor can help you choose an appropriate account and gain the control you'll need to adjust your investment selections according to changing economic and market conditions or changes in your personal situation.

Traditional IRAs
Introduced in 1974, the Traditional IRA has been a popular vehicle for tax-deferred retirement savings. The benefits of the Traditional IRA include:

• Working individuals and their spouses can each contribute to a Traditional IRA.
• Individual contribution limits are $5,000 annually, depending on your age.
• Whether you can deduct your contributions or not, any earnings growth is tax-deferred.

Withdrawals from an IRA are subject to ordinary income tax and may be subject to a federal 10% penalty if taken prior to age 59 ½.

Roth IRA
The Roth IRA became available in 1998 and has gained popularity because of its potential for tax-free withdrawals of contributions and earnings.

Provisions of the Roth IRA include:

• Contributions are always non-deductible.
• Tax-free withdrawals of contributions and earnings may be taken after five years if you are at least age 59½ (certain exceptions may apply).
• Distributions from Roth IRAs are not mandatory during the holders lifetime.
• If your income is not more than $100,000 (joint or single), you may be eligible to convert part or all of your Traditional IRA to a Roth IRA.
• Qualified Roth IRA distributions are not subject to state and local taxation in most states.

Rollover IRA
For individuals who are changing jobs, being displaced from employment, or retiring, IRA rollovers can be ideal. Provisions include:

• Transfer a lump sum directly from your plan account and maintain the tax-deferred status of your retirement assets.
• Continue deferral of taxes on monies accumulated in your former employer's 401(k), 457, 403(b) or other retirement plan.
• Rollover contributions are not subject to the $5,000-per-year limit on contributions to regular IRAs.
• Withdrawals from an IRA are subject to ordinary income tax and may be subject to a federal 10% penalty if taken prior to age 59 ½.

SEP and SIMPLE Plans
Since the introduction of SEP and SIMPLE plans, owners of small and new businesses have many ways to help employees save for retirement.

• All company contributions are immediately 100% vested and available to the participants.
• Part-time employees may not be excluded.
• Company contributions are tax-deductible for the employer and neither contributions nor earnings are taxed to participants until distributed.
• Withdrawals from a SIMPLE-IRA are subject to ordinary income tax and may be subject to a federal 10% penalty if taken before age 59 ½. The federal penalty is 25% if withdrawals are taken during the first two years of plan membership.

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