Traditional IRA | Open a Traditional IRA With Merrill Edge
A Traditional IRA offers the potential for tax-deductible contributions.
Tax-advantaged growth

Contributions and earnings from a traditional IRA grow tax-deferred until withdrawn at which time they are taxed at your current rate.(If contributions are not tax-deductible, then they can be withdrawn tax-free under a pro-rata rule.) If withdrawals occur before you are age 59 ½ then you also may be subject to a 10% additional tax.

Contributions may be fully tax-deductible if any of the following apply:

  • Neither you nor your spouse is an active participant in an employer-sponsored retirement plan
  • You participate in an employer-sponsored retirement plan and your 2013 MAGI is $59,000 or less as a single taxpayer or $95,000 or less as married taxpayers filing jointly
  • You do not participate in an employer-sponsored retirement plan, but your spouse does, and joint MAGI is no more than $178,000 for 2013
Contributions
  • If you are under age 50 you can contribute up to $5,500 for 2013
  • For each year during which you are age 50 or older, Traditional IRA annual contribution limits increase by $1,000.
Traditional IRA Tax Deduction Guidelines
Tax Deductibility of Traditional IRA Contributions
Tax deductibility of your Traditional IRA contribution is based on several factors:
  • Your federal tax filing status
  • Your modified adjusted gross income
  • Whether you or your spouse participates in an employer-sponsored retirement plan such as 401(k), 403(b) or pension.
  • Your age
See the chart below for guidelines.
Eligibility

Anyone under age 70 ½ who has earned income equal to or greater than their IRA contribution amount.

  • If you contribute to an employer-sponsored plan like a 401(k) or 403(b), you are still eligible to contribute to a Traditional IRA account
  • If you have no earned income but your spouse earns enough income to cover your contribution as well as their own, you can contribute to a Traditional IRA account
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Tax Deductibility of Traditional IRA
for participants in employer-sponsored retirement plans
If your Modified Adjusted Gross Income
and filing status is:		 You can deduct this much of your contribution
Single Filers MARRIED FILING JOINTLY Under
Age 50		 Age 50
and Over
You Participate in an Employer Retirement
Plan		 Only your Spouse
Participates in an Employer Retirement
Plan
$59,000 & under $95,000 & under $178,000 & under $5,500 $6,500
$60,000 $97,000 $179,000 $4,950 $5,850
$61,000 $99,000 $180,000 $4,400 $5,200
$62,000 $101,000 $181,000 $3,850 $4,550
$63,000 $103,000 $182,000 $3,300 $3,900
$64,000 $105,000 $183,000 $2,750 $3,250
$65,000 $107,000 $184,000 $2,200 $2,600
$66,000 $109,000 $185,000 $1,650 $1,950
$67,000 $111,000 $186,000 $1,100 $1,300
$68,000 $113,000 $187,000 $550 $650
$69,000 & over $115,000 & over $188,000 & over $0 $0

Additional Considerations:

If neither you nor your spouse participates in an employer-sponsored retirement plan, your Traditional IRA contribution may be fully deductible.
Married Filing Separately - If you are Married, Filing Separately and your AGI is greater than $10,000, you may not be eligible to deduct your contribution to a Traditional IRA.
You may contribute simultaneously to a Traditional IRA and a Roth IRA (subject to eligibility) as long as the total contributed to all (Traditional and/or Roth) IRAs equals no more than the contribution limits listed above for the year of contribution.
Please see IRS Publication 590 at www.irs.gov for further details regarding Roth IRA contribution limits and guidelines.
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Make the Most of Your Traditional IRA
1 Certain restrictions apply.

Individuals who contribute or transfer $5,000 or more in cash or securities to a qualifying Merrill Edge SEP, SIMPLE, Roth, traditional or rollover IRA by December 31, 2013, will have their annual custodial fee of up to $100 waived for the life of the account. Waiver of fees, including account fees, may not be used as an inducement to sell any kind of insurance, including life insurance or annuities. All other fees will still apply. For more detailed information about the fees associated with a Merrill Edge IRA, please refer to your IRA Disclosure & Custodial Agreement. Trust IRA, 529 accounts and Coverdell ESAs do not qualify for the IRA custodial fee waiver status. Contributions or transfers can be made in a lump sum or in several contributions or transfers totaling $5,000 or more to one account. Assets transferred from existing Merrill Lynch accounts and cumulative household account investments totaling $5,000 do not qualify for the fee waiver. Investment value is based solely on the asset valuation at the time of contribution or transfer and is not affected by subsequent market fluctuations. This offer is subject to change and/or termination without advance notice.

Any tax statements contained herein were not intended or written to be used, and cannot be used for the purpose of avoiding U.S. federal, state or local tax penalties. Neither Merrill Edge nor its Financial Solutions Advisors provide tax, accounting or legal advice. Clients should review any planned financial transactions or arrangements that may have tax, accounting or legal implications with their personal professional advisors.