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David P. McCabe,
WMCP®, ChFC®, CLU®
Financial Planner
Nathaniel D. High, RICP®
Financial Planner
Nicholas J. Over, CFP®
Financial Planner
Sara E. Martin
Client Relations Manager
Jennifer A. McCabe
Client Relations Specialist
jennifer.mccabe@prudential.com
Centuria Financial Group
2333 Baltimore Blvd Suite B
Finksburg, MD 21048
Phone: 443-952-7232
May/June 2023
Traditional But Not Deductible
When investors examine their retirement investment options, they typically pay a great deal of attention to whether their contributions are deductible or not. There are a wide variety of investment accounts, from 401(k) and 403(b) plans, that offer this benefit regardless of income. For high net worth individuals, limits to how much they can contribute to these plans may leave them looking for another place to put additional monies.
The Roth IRA, which doesn’t offer deductible contributions but does feature tax-free qualified distributions, is one place to look. However, high net worth individuals often get shut out of investing in a Roth IRA due to income restrictions.
So, where can these retirement investors go if they max out on other traditional qualified accounts and don’t qualify for the Roth? A traditional, nondeductible IRA still offers potential tax-deferred gains. Talk to your financial professional to learn more.
IRA Rules
So why bother at all with a traditional IRA if you can’t defer taxes on contributions? Potential tax-deferred growth of your investments is the four-word answer. Additionally, the percentage of your contributions to investment gain also won’t be taxed when you begin distributions.There are other alternatives, including taxable investments and potentially qualifying for the Roth in some years by shifting income, so talk to your financial professional to learn if this approach is right for you.
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Centuria Financial Group is not affiliated with Prudential Financial. Centuria Financial Group sells insurance products of Prudential Financial's affiliated insurance companies in addition to products of non-affiliated insurance companies. Centuria Financial Group is authorized to sell and service certain insurance products of Prudential Financial companies as well as use this material. Centuria Financial Group and its representatives do not give tax or legal advice. Please consult with your own advisors regarding your particular situation. Offering financial planning and investment advisory services and programs through Pruco Securities, LLC (Pruco), under the marketing name Prudential Financial Planning Services (PFPS), pursuant to a separate client agreement. Offering insurance and securities products and services as a registered representative of Pruco, and an agent of issuing insurance companies. 1-800-778-2255. Sara E. Martin and Jennifer McCabe are employed by David McCabe and not The Prudential Insurance Company of America or its subsidiaries.
This newsletter is general educational information provided by a Prudential Financial Professional and is not intended to market or sell any specific products and services, but rather provide general information about the subject matter covered only.
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