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Individual Retirement Accounts (IRAs)

IRA Basics


What is an IRA?

Individual retirement accounts (IRAs) are accounts specifically set up to use during retirement by offering significant tax advantages. And the sooner you start, the longer your money has to grow.


Why invest in an IRA?

In retirement you may need as much as 100% of your current after-tax income (take-home pay) minus any amount you are saving for retirement each year. This makes it all the more important to start saving sooner rather than later, and an IRA can help you get started.

What’s the difference between

Roth and Traditional IRAs?

The 2 most common types of IRAs are Traditional and Roth. Which one you choose (or qualify for) depends on your age, income, and financial goals. Savings IRAs from Bank of America and Investment IRAs from Merrill Edge® are available in both Traditional and Roth.

Compare IRAs

  1. There is a single, 5-year holding period when determining whether earnings can be withdrawn federal (and, in most cases, state) income tax-free as part of a qualified distribution from a Roth IRA. This period begins January 1 of the year of the first contribution to any Roth IRA account.

Retirement solutions for your future

Savings IRAs

Looking to lock in a guaranteed return for the term of your IRA CD? IRAs from Bank of America are FDIC insuredFootnote1 and offer interest-bearing CD or money market savings account choices.

Investment IRAs

Looking for a full range of investment choices? Open an IRA from Merrill Edge® and choose from a wide variety of stocks, bonds, ETFs and well-known mutual funds.

Compare IRAs

Comparison of Accounts
Roth IRA Traditional IRA
Unique Benefits Any earnings are federal income tax free if withdrawn at or after age 59 ½ and the account has been open five years or more Contributions (not earnings) can be withdrawn tax free at any timeFootnote Contributions are not tax-deductible Any earnings grow federal income tax deferred until withdrawn at or after 59 ½, at which time they are taxed at your current federal income tax rate Contributions and earnings can be withdrawn free of the 10% additional federal income tax at or after age 59 ½ Contributions may be tax deductible
Who is eligible? Any age, as long as your modified adjusted gross income (MAGI) does not equal or exceed: 2016 Single Tax Filers:$132,000 Joint Tax Filers:$194,000 Keep in mind that your Roth contribution limit phases out if your earned income is between $117,000-$132,000 for singles filers and $184,000-$194,000 for joint filers. You may convert a traditional IRA to a Roth IRA regardless of your MAGI level. MAGI-based restrictions only apply to how much you can contribute to a Roth IRA. Anyone under the age of 70 ½ who has earned income equal to or greater than their IRA contribution amount.
Withdrawals No Required Minimum Distribution (RMD) ever. Subject to an exception, a Required Minimum Distribution (RMD) must be taken beginning in the year in which you turn age 70 ½.

Planning for retirement?

Wherever you are in life, look to Bank of America and Merrill Edge® for valuable retirement tools and insights
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