IRAs (Roth and Traditional)

Take the next step and choose a MissionSquare Retirement IRA

Open a Traditional IRA

Open a Roth IRA

You can open and fund a new IRA, including transferring assets from another retirement account – it takes just a few steps.

A MissionSquare Retirement Roth or traditional IRA complements your employer-sponsored retirement plan by enabling you to:

  • Save for a variety of long-term and retirement goals
  • Benefit from tax-deductible contributions or tax-free earnings
  • Have flexibility, such as converting other types of plans into an IRA
  • Enjoy a range of investment choices
  • Get saving and investing advice through Guided Pathways® Advisory Services

Types of IRAs offered at MissionSquare

MissionSquare offers traditional, Roth, and SEP IRAs. Each has different advantages based on your current income, and short- and long-term needs, goals, and circumstances. You also may be able to make convenient paycheck contributions to a MissionSquare Retirement Payroll IRA.

If You’re an Employee:

You can learn more about IRAs.

You can also contact your MissionSquare representative or Participant Services at (800) 669-7400.

If You’re an Employer:

Interested in starting a payroll IRA? Contact MissionSquare.

Traditional IRAs

A traditional IRA allows you to make before-tax contributions to your IRA. By doing so, you are lowering your annual taxable income. Instead, you pay taxes when you withdraw the money when you retire, presumably when you’re in the same or a lower tax bracket, and still leveraging tax benefits.

Roth IRAs

Contributing to a Roth IRA involves using after-tax dollars to make contributions. Therefore, you’ve already paid tax on the money you’re putting into your Roth. There are no immediate tax benefits when you contribute to a Roth; however, your money grows tax-free, and you can withdraw it once you reach retirement age (59½) without paying taxes or penalties.

SEP IRA

A Simplified Employee Pension or SEP is a retirement plan that businesses of any size can use. Even a self-employed person can set up a SEP. These are easy to establish and have low administrative costs, as well as flexible annual contribution requirements. A SEP better accommodates fluctuations in cash flow for certain types of businesses.

SEPs are funded solely by employers, and they must contribute the same amount equally to all employees who are eligible for the plan. There are contribution limits to each employee’s SEP IRA and employees aren’t allowed to take loans from the plan. Find out more about SEP IRAs.

Payroll Deduction IRA

This is an employee-only contribution plan to either a Roth or traditional IRA set up by the employer. An employee authorizes their employer to make payroll deductions directly to the IRA.

Payroll deduction IRAs have the same contribution limits as other IRAs and are subject to the same income taxes and penalties if withdrawals are taken before retirement age.

Traditional vs. Roth IRA: Which IRA Is Right for You?

If you need help determining which IRA is right for you, it may depend greatly on whether you plan to be in a higher tax bracket when you retire or if you estimate you’ll be at about the same level or lower than you currently are. A Roth IRA may be better suited for someone who will be taxed at a higher rate later in life. A traditional IRA may be the better choice if you foresee being in a lower tax bracket, and subject to lower tax rates on your future withdrawals. At MissionSquare, you can open a Roth, a traditional IRA, or both.

IRA Contribution Limits

IRA contribution limits can vary from year to year. For the 2022 tax year, the maximum combined contribution you can make to IRA accounts is $6,000 if you’re under age 50 or $7,000 if you’re age 50 or older by the end of the year. 2022 contributions can be made until April 18, 2023. That limit increases for 2023 to $6,500 if you’re under age 50 and $7,500 if you’re age 50 or older.

IRA Income Limits

Roth IRAs have income limits based on how you file your taxes. Here are IRS details on 2023 Roth IRA contribution amounts as well as for 2022.

Traditional IRAs have income limits if you or your spouse have a workplace retirement plan. For example, if one of you has a 401(k), you may be limited in how much of your contribution will be tax deductible. Learn more about traditional IRA deduction limits for 2023.

SEP IRA contributions are also limited. The maximum amount an employer can make is based on whichever number is less: $66,000 (for 2023) or 25% of an employee’s compensation (The maximum for 2022 is $61,000).

For example, Alice makes $400,000 a year. Her employer wants to make maximum contributions for 2022. Since 25% of her compensation is $100,000, her employer will only be allowed to contribute $61,000, the maximum this year. If Alice’s earnings stay the same in 2023, the most her employer could contribute would be $66,000.

Also keep in mind, there are no catch-up contributions allowed for SEP IRAs.

Excess Contributions

Sometimes you may find you’ve contributed an excess amount to your IRA for the year or that you’ve exceeded the income limits for contribution to a Roth IRA. These are called “ineligible contributions” — and they will cost you a 6% penalty for every year the excess funds remain in your account.

However, the IRS permits you to remedy excess contributions. Two ways are through IRA recharacterization or through a withdrawal that the IRS calls a “corrective distribution.” Find out more about excess IRA contributions.

IRA Recharacterization

You can recharacterize (or reclassify) an IRA contribution by changing the status of a contribution from one type of IRA to another, such as from a Roth to a traditional IRA. There are several scenarios where this might be useful. Explore IRA recharacterizations.

IRA Rollovers

IRA rollovers involve moving funds from one type of retirement account, such as a 401(k), 403(b), or 457(b) to an IRA. People often roll funds over to an IRA to have greater investment choices without having to pay taxes and penalties at time of withdrawal. Find out more about IRA rollovers.

Withdrawal Rules

Similar to other retirement plans, you can withdraw from an IRA at age 59½ without penalty, as long as you’ve held the account for five years. If you withdraw before that time period, you’ll incur a 10% penalty fee, although there are some exceptions to IRA early withdrawal rules.

Required Minimum Distributions

The IRS requires you to make RMDs from your traditional IRA starting at age 73 (or 72 if you were born before July 1, 1949). RMD amounts are determined according to an IRS calculator based on several factors. Roth IRAs don’t have RMDs, meaning you aren’t required to withdraw from the account as long as you live. For more details, visit the IRS page on IRA distributions, or contact your MissionSquare representative.

IRAs and Taxes

Earnings on both traditional and Roth IRA contributions grow tax deferred. The main tax difference is with traditional IRAs, you contribute pre-tax dollars and pay taxes when you begin withdrawing money from your IRA. With Roth IRAs, you’ve already paid taxes before contributing funds to your IRA and pay no taxes on withdrawal.

Questions about IRAs?

Contact us. We look forward to assisting you.

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