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Is teacher retirement system and IRA?
Is teacher retirement a traditional ira?
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IRA's are exempt from some taxes
The right answer is, It Depends. I like a ROTH IRA. Here we pay tax on our contributons. Qualified distributions from a ROTH IRA are tax free. The ROTH IRA also allows us to t…ake our Annual Contributions out of the IRA at any time without tax or without penalty for any reason, even to make a trip to Vegas and put it all on red. A Traditional IRA is OK too. Here we do not pay tax on our annual contributions giving us a tax advantage now. All distributions from a Traditional IRA are subject to income tax, and if taken before age 59.5 years, there is a 10% penalty. There are a few items that qualify for avoiding the 10% penalty. Everyone can contribute to a Traditional. Not everyone can take the tax deduction. This is called an after tax Traditional IRA. The earnings are tax deferred. When you take a distribution from this IRA part of the distribution is subject to income tax and part of the distribution is tax free. These amounts are based on the ratio of your after tax contributions to the total amount of the IRA. Both IRAs will provide you with more investment choices when you use a discount broker as the IRA custodian. IRAs typically are afforded $1,000,000 of bankruptcy protection. This may vary from state to state. The 401k contribution is taken from our pay each pay day. Some employer's offer a matching contribution. The Traditional 401k is not taxed when we contribute. It is taxed when we take a qualified distribution. Investment choices are usually limited to a set of mutual funds and savings accounts. Some 401k plans offer a loan feature. I do not recommend you ever take a loan from your 401k account. Some employers offer a ROTH 401k. Your contributions are taxed as you make the contribution. When you take the qualified distribution from the plan your money comes out tax free. When the employer makes a matching contribution to this IRA, it is a tax deferred contribution. You will pay ordinary income taxes on distributions of the employer's contribution. When you start contributing to a 401k plan, READ the Summary Plan Description. You will be given a copy, read it. The big advantage of a 401k plan is for 2008 you can contribute up to $15,500. And if you are over age 50, you can contribute an additional $5,000. This "Catch-up" contribution can be made even if your 401k limits you to an amount lower than the $15,500. Which is better? It Depends.
Eligible Compensation You must have eligible compensation in order to be eligible to contribute to an IRA. For IRA purposes, eligible compensation includes wages, salaries, t…ips, commissions received as a percentage of sales, taxable alimony and separate maintenance payment you receive under a decree of divorce or separate maintenance. If you are a sole proprietor or a partner, your compensation is based on your net earnings from your trade or business, reduced by contributions to any employer-sponsored plan that you adopt and any deduction allowed for 50% of your self-employment taxes (see page 7 of the 2004 version of IRS Publication 590). Amounts you receive as interest, dividends, pension, annuity, earnings and profits from property investments, and any amount you exclude from your income are not considered eligible compensation for IRA purposes.
You cannot contribute more to your IRA than the amount of your "compensation income." Compensation income is the taxable portion of your wages/salary, net self-employment, and… alimony. Any amount shown in box 1 of a W-2 minus the amount shown in box 11 of the same W-2 is automatically considered taxable compensation income. So if you are not doing some kind of work or receiving alimony, you can't contribute. There is no age limit for contributions to a Roth IRA. People over 70 1/2 cannot contribute to a traditional IRA.
however long you want;)
The state of PA has the best retirement package for teachers. If you have 30 years you will get approximately 87.5% of your salary for the rest of your life.
55-65 is the average. It is also based on the number of teaching years. If a teacher starts to teach late in life they have to teach longer older than a teacher who starts you…nger. In CA a teacher can NOT get retirement less than 55 years old and under 10 full years of teaching. There is a formula that figures what you will get each month in the retirement system and the longer you teach the more you put in and will make each month. As an example, in Idaho teachers have a rule of 90 - number of years taught and age must = 90.
One would need to make a visit to a bank in order to open an IRA retirement account. Once a bank visit was made, savings can be deposited and saved for retirement.
Penn., GA, and IL.
From what understand, Illinois and Georgia are tops on the list.
The same reasons anyone retires from any job such as: 1. Manditory based on having reached a maximum age. 2. Unable to function in their job. 3. Medical emergency 4. Want to c…hange career. 5. No longer interested in working. 6. Threat of being fired or laid off 7. Offered a generous retirement package to good to pass up.
They are retiring to retain the pension they signed up for before it is stripped down due to a broken economy.
Being a retired teacher, I can give you a fairly straight shot on this: Theoretically, a teacher can teach as long as they wish, but in most states in the USA, a full teaching… career (meaning how long you have to teach to retire at full pension) is 30 years. Some teachers teach for 30 years and retire. Some teach for 45 or more years. But the average, nationwide is about 35 years.
What is the formula that determines the amount of money you need to take out of your IRA at retirement?
Regardless of when you retire, you don't have to withdraw money from your IRA until age 70 1/2. At that time, the amount you must withdraw each year is a function of how much …money is in the account and your life expectancy.