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IRA FAQ

If you have questions about IRAs (Individual Retirement Accounts), Synchrony Bank has answered some of the most frequently asked questions about this popular retirement savings account. We make it easy to learn about saving for retirement and provide different options for your financial goals.

Read on to learn the answers to the most frequently asked questions about IRAs.

FAQs about IRAs

IRAs icon

Here are the most frequently asked questions about IRAs:

1. What Is an IRA?

An Individual Retirement Account, or IRA, is a tax-advantaged retirement savings plan regulated by the IRS.

2. What Is the Difference Between a Traditional IRA and a Roth IRA?

The type of tax advantage that you receive with each account distinguishes one IRA from the other.

Another difference between the accounts is the time period when you’re allowed to make withdrawals. You must begin making withdrawals from a Traditional IRA once you turn 70 ½ years old. There is no required withdrawal date for Roth IRAs. 

3. Who Can Open an IRA?

Anyone who earns income and is younger than 70 ½ years of age can open an IRA. Roth IRAs can be opened even after you turn 70 ½ years old, as long as you earn taxable income and have income under the IRS limits.

4. How Much Can I Contribute to My IRA?

You can view the maximum amount that you can contribute annually on the IRS website. These contributions are subject to IRS limits and change annually. You may contribute to an IRA from January 1 of any calendar year up to the tax filing deadline in the following calendar year, which is typically April 15.

If you make an excess contribution, you may incur a penalty and will have to take the money out.

5. How Is an IRA Different from a 401(k) Plan?

Most IRAs are opened by individuals as retirement saving vehicles separate from their employer-sponsored savings plan. 401(k) plans are offered by employers to their employees. These savings plans allow higher contributions than IRAs and allow employees to receive matching contributions from their employers.

Let Synchrony Bank Answer Your IRA FAQs

At Synchrony Bank, we can answer any of your IRA FAQs. Opening an IRA with Synchrony Bank requires a low minimum deposit. Synchrony Bank does not provide tax advice so be sure to contact your tax advisor or financial consultant before opening or contributing to an IRA.

Synchrony Bank provides award-winning customer service and money insured by the FDIC up to $250,000 per depositor for each ownership category.

To find out more about how an IRA can help you save for retirement, call Synchrony Bank at 1-844-345-5789 or click here to open an account today.

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Sources:

IRS: https://www.irs.gov/retirement-plans/traditional-and-roth-iras

IRS: https://www.irs.gov/retirement-plans/plan-participant-employee/retirement-topics-ira-contribution-limits


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