With a Schwab Traditional IRA, you won't pay taxes on earnings until you make withdrawals, and you may get immediate tax benefits when you contribute.
When you open a Roth IRA, you'll get your tax benefits later, when you take out your retirement savings tax-free.
Rolling over your plan from a former employer is one way to take control of your retirement savings. If, after considering your options, you decide a Rollover IRA is right for your situation, you can get start-to-finish help from a Schwab Rollover Consultant.
A rollover of retirement plan assets to an IRA is not your only option. Carefully consider all of your available options, which may include but not be limited to keeping your assets in your former employer's plan, rolling over assets to a new employer's plan, or taking a cash distribution (taxes and withdrawal penalties may apply). Prior to a decision, be sure to understand the benefits and limitations of your available options and consider factors such as differences in investment-related expenses, plan or account fees, available investment options, distribution options, legal and creditor protections, the availability of loan provisions, tax treatment, and other concerns specific to your individual circumstances. For more information on your available options, see schwab.com/rolloveroptions.
An Inherited IRA is created when someone inherits an IRA after the death of the original owner. If you've inherited an IRA or an account in an employee-sponsored retirement plan, consider transferring it to a Schwab Inherited IRA.
Do you have a child with earned income? A Custodial IRA can be a great way to teach your child the value of investing while giving them a head start on retirement savings.
How much can I contribute to my IRA each year?
For a Traditional IRA, you can contribute up to $5,500 for tax year 2016 and $5,500 for tax year 2017, or up to 100% of earned income, whichever is less. Individuals age 50 and over can also make catch-up contributions from earned income: an additional $1,000 each year for tax years 2016 and 2016. Not all of your contribution may be eligible for a current-year tax deduction. See contribution limits.
Roth IRAs have the same contribution limits but also have income eligibility requirements.
Can I make early withdrawals from my IRA?
Before you reach age 59½, you are subject to a 10% penalty, in addition to federal and state taxes, on Traditional IRA distributions and earnings withdrawals from Roth IRAs. Roth IRA contributions can be withdrawn at any time without penalty. If IRS requirements are met, distributions from Traditional IRAs and from Roth earnings are penalty-free under certain circumstances.
What kinds of investment choices do I have?
Choose from stocks, bonds, ETFs, mutual funds, CDs, and more. Schwab also offers professional portfolio management solutions that can make investing even easier. As a Schwab client, you can have a complimentary consultation with a Schwab investment professional who can help you decide which investments are right for you.
Tools and Guidance
Our retirement tools and calculators can help you choose the IRA that's right for you.
What clients think about our Individual Retirement Accounts (IRAs):
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Clients of independent investment advisors: You may also contact your advisor or call Schwab Alliance at 800-515-2157.
1. See the Charles Schwab Pricing Guide for Indidivual Investors (the "Guide") and any amendments to the Guide for comprehensive details on fees.