Your Guide to Individual Retirement Accounts · Traditional and Roth IRAs There are two types of IRAs you can create – traditional and Roth. A traditional IRA may allow you to save

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Your Guide to

Individual Retirement Accounts

Your Guide to Individual Retirement Accounts (IRAs)

• TRADITIONAL AND ROTH IRAs

• ROLLOVERS

• A CONSUMER’S GUIDE TO IRA ELIGIBILITY AND BENEFIT CHART

Only 10% of today’s private-sector workers can count on retiring with a pension which used to be a standard part of most people’s retirement plan.1

IRAs have become a trusted and popular retirement-savings vehicle to help people

build a robust retirement portfolio. An individual retirement account (IRA) is a trust

or custodial account set up in the United States for the exclusive benefit of you or

your beneficiaries.

$5.4 trillion in IRA

assets in the U.S.

at the end of 20123

28% of all retirement accounts are IRAs2

4 out of 10, or 49 million, U.S.

households own at least one type of IRA2

A pension and Social Security may not replace your entire income. This means you have to take charge

of your own money if you want to retire well.

1http://money.cnn.com/retirement/guide/pensions_basics.moneymag/index7.htm2http://www.icifactbook.org/fb_ch7.html#retirement3http://www.icifactbook.org/

Secur i t y Benef i t

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Traditional and Roth IRAs There are two types of IRAs you can create – traditional and Roth. A traditional IRA

may allow you to save with tax-deductible contributions, and your assets grow tax-free

until you withdraw them. A Roth IRA allows you to contribute post-tax dollars, so your

withdrawals may be tax-free at retirement.

Roth IRA ȥ Contributions are made on an after-tax basis.

ȥ If certain requirements are met, all earnings are

tax-free; no future taxes are due on Roth assets.

ȥ You may be able to access Roth assets penalty-free

prior to age 59½ if special circumstances apply.

Traditional IRA ȥ Contributions may be made on a pre-tax basis.

ȥ Taxes are due when withdrawals are made.

ȥ This IRA is sometimes called a Contributory IRA.

Contributing to an IRABasically, anyone younger than age 70½ with earned income or compensation can

begin and contribute to an IRA. There are contribution and adjusted gross income

(AGI) limit situations that apply. See The Benefit Chart on pages 6 and 7 for details.


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RolloversAnother way to contribute to an IRA is through a rollover. A rollover is a tax-free

distribution to you of cash or other assets from one retirement plan to another

retirement plan. The contribution to the second retirement plan is called a “rollover

contribution.” Most often people execute a rollover if they leave their employer, or

consolidate assets into one IRA.

Indirect Rollover ȥ You are given funds from

an existing retirement plan

via check; it is up to you to

redeposit the funds into the

new IRA.

ȥ There is a 60-day period to

re-invest the funds; any amount

not re-invested or outside the

60 days is subject to taxes and

possible IRS penalties.

Direct Rollover ȥ Assets from an existing

retirement account are paid

directly to the qualified plan or

IRA Custodian/Trustee, not to you.

ȥ There is no tax liability as there

is with a distribution.

Partial RolloverYou don’t have to put the entire amount you withdraw from your retirement account into the

IRA. You can invest a part of the assets and do something else with the rest; this is called

a partial rollover. The portion not rolled over, more than likely is taxable and subject to an

IRA early-distribution penalty.

There Are Two Types of Rollovers – Direct and Indirect.

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Your Guide to Indiv idual Ret irement Accounts

A Consumer’s Guide to IRA Eligibility and Benefit Chart


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IRA Type Eligibility Contribution Limits/Deadline Distribution Regulations Suitability Benefits

TRADITIONAL IRA(Deductible)

Have earned income

Under age 70½

Comply with income restrictions for deductibility if you are an active participant in a retirement plan

$5,500 for 2013 and 2014

Catch-Up Contributions for Individuals Age 50 or Older ȥ $1,000 for 2013 and 2014

ȥ April 15 deadline for contributions and catch-up contributions for prior year

Required Minimum Distributions begin at age 70½

Distributions that avoid IRS withdrawal penalty: ȥ Death or disability ȥ First-time home purchase ($10,000 maximum) ȥ Qualified higher education expenses ȥ Age 59½ ȥ Medical expenses (in excess of 7.5% of AGI) ȥ Health insurance if unemployed ȥ Received as substantially equal periodic

payments over owner’s life expectancy (72(t)) ȥ Qualified reservist distribution ȥ Distributions due to IRS levy ȥ Qualified hurricane distribution

Eligible persons desiring a current-year tax deduction

Persons expecting to be in a lower tax bracket after retirement

Nonemployed spouse, filing a joint return

Tax-deductible contributions

Tax-deferred growth

Penalty-free withdrawals under certain circumstances

Beneficiaries can “stretch” the Required Minimum Distributions

ROTH IRA Have earned income

Modified adjusted gross income (AGI) limits for Roth IRA contributions

Taxable YearBeginning Single Taxpayer

2013 $112,000 - $127,0002014 $114,000 - $129,000

Beginning Joint Returns

2013 $178,000 - $188,0002014 $181,000 - $191,000

$5,500 for 2013 and 2014



Contributions may be withdrawn tax free at any time

Distributions of earnings that avoid taxes* and IRS withdrawal penalty after five years: ȥ Age 59½ ȥ Death or disability ȥ First-time home purchase ($10,000 maximum)

Persons ineligible for a deductible traditional IRA

Persons expecting to be in a higher tax bracket after retirement

Any persons with earned income

Nonemployed spouse if filing a joint return

Qualified withdrawals are tax-free

Contributions may continue past age 70½ if investor has earned income

No Required Minimum Distributions during lifetime


ROLLOVER IRA Persons receiving a distribution eligible for rollover from a retirement plan or other IRAs

Any amount may be rolled over

Must be rolled into an IRA within 60 days of the distribution, (if an indirect rollover)

Direct rollovers are the preferred method of rollovers




Persons receiving a lump sum distribution from a retirement plan

Earnings compound tax deferred

Avoids taxes and penalties

Allows qualified withdrawals without penalty


*No federal taxes apply; however, state tax treatment of Roth IRA earnings may vary by state.

IRA Type Eligibility Contribution Limits/Deadline Distribution Regulations Suitability Benefits

TRADITIONAL IRA(Deductible)

Have earned income

Under age 70½

Comply with income restrictions for deductibility if you are an active participant in a retirement plan

$5,500 for 2013 and 2014






Eligible persons desiring a current-year tax deduction

Persons expecting to be in a lower tax bracket after retirement

Nonemployed spouse, filing a joint return

Tax-deductible contributions

Tax-deferred growth

Penalty-free withdrawals under certain circumstances

Beneficiaries can “stretch” the IRA

ROTH IRA Have earned income

Modified AGI limits for Roth IRA contributions

Taxable YearBeginning Single Taxpayer

2013 $112,000 - $127,0002014 $114,000 - $129,000

Beginning Joint Returns

2013 $178,000 - $188,0002014 $181,000 - $191,000

$5,500 for 2013 and 2014



Contributions may be withdrawn tax free at any time

Distributions of earnings that avoid taxes* and IRS withdrawal penalty after five years; and: ȥ Age 59½ ȥ Death or disability ȥ First-time home purchase ($10,000 maximum)

Persons ineligible for a deductible traditional IRA

Persons expecting to be in a higher tax bracket after retirement

Any persons with earned income

Nonemployed spouse if filing a joint return

Qualified withdrawals are tax-free

Contributions may continue past age 70½ if investor has earned income

No Required Minimum Distributions during lifetime


ROLLOVER IRA Persons receiving a distribution eligible for rollover from a retirement plan

Any amount may be rolled over

Must be rolled into an IRA within 60 days of the distribution

Direct rollovers are the preferred method of rollovers




Persons receiving a lump sum distribution from a retirement plan

Earnings compound tax deferred

Avoids taxes and penalties

Allows qualified withdrawals without penalty


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Your Guide to Indiv idual Ret irement Accounts

®

One Security Benefit Place | Topeka, Kansas 66636-0001 25-82179-00 2014/01/15

Looking for additional guidance on IRAs or ideal investment

vehicles within an IRA? • Talk to your financial advisor or

call Security Benefit at 1.800.888.2461

SecurityBenefit.com

A N N U I T I E S • M U T U A L F U N D S • R E T I R E M E N T P L A N S

Whether you’re just beginning to save for retirement or looking to

consolidate your assets into one account, IRAs may be a solution for you. Grow your investment tax deferred and

gain confidence in your retirement.

Services and securities are offered through Security Distributors, Inc. (SDI). Annuities are issued in all states except New York by Security Benefit Life Insurance Company (SBL). In New York, annuities are issued by First Security Benefit Life Insurance and Annuity Company of New York (FSBL), Rye Brook NY. SDI is a

wholly-owned subsidiary of SBL. SBL and FSBL are subsidiaries of Security Benefit Corporation (“Security Benefit”).

You should consider the investment objectives, risks, and charges and expenses of the mutual funds or variable annuities carefully before investing. You may obtain a prospectus that contains this and other information about

the mutual funds or variable annuities and their investment options by calling our National Service Center at 1-800-888-2461. You should read the prospectus carefully before investing. Investing in mutual funds and

variable annuities involves risk and there is no guarantee of investment results.These are general guidelines and are not meant to replace legal or tax advice for your specific situation.

Documents

Your Guide to Individual Retirement Accounts · Traditional and Roth IRAs There are two types of IRAs you can create – traditional and Roth. A traditional IRA may allow you to save