WHY CITI?
- Wide range of FDIC insured savings options (CDs, Day-to-Day Savings through Citibank, N.A.), as well as non-FDIC investment choices (stocks, bonds, mutual funds) offered through Citicorp Investment Services*; all under one Plan.
- Specialist guidance - Retirement specialists and investment representatives available through a simple phone call or at your local Citibank Financial Center.
- Convenience - make automatic monthly contributions to your IRA from your Citibank account.
Keogh Money Purchase Plan
The Keogh Money Purchase Plan is an employer-funded retirement plan in which an employer contributes to the Plan on behalf of eligible employees and him/herself. Keogh contributions are fully deductible to the business. The earnings generated by investments in the Plan are tax- deferred until withdrawn, typically at retirement when participants may be in a lower tax bracket.
- Funding - A fixed contribution percentage is established when the Plan is opened and this amount cannot be changed. Each year, the business must contribute the amount designated for all eligible employees.
- Maximum contributions - The maximum contribution is the lesser of 25% of the participant's total benefits or $44,000 for tax year 2006 and $45,000 for tax year 2007.
Keogh Profit Sharing Plan
The Keogh Profit Sharing Plan lets the employer decide each year how much to contribute and even allows the employer to skip a year. Keogh contributions are fully deductible and the earnings generated by investments in the Plan are tax deferred until withdrawn, typically at retirement when participants may be in a lower tax bracket.
- Funding- An employer may even skip a year of contributions. An employer may change the contribution percentage yearly.
- Maximum contributions - The maximum contribution is the lesser of 25% of the participant's compensation or $44,000 for tax year 2006 and $45,000 for tax year 2007.
If an employer establishes both a Money Purchase and a Profit Sharing Plan, the maximum contribution between the two Plans is the lesser of 25% of the participants compensation or $44,000 for tax year 2006 and $45,000 for tax year 2007.
Roth IRA
A Roth IRA allows individuals, to save money for use in retirement while allowing it to grow tax-deferred. Both principal and earnings are free of federal income tax for qualified distributions. Earnings can grow tax-deferred until they are withdrawn.
- Maximum annual contribution for tax years 2006 and 2007 of $4,000 ($4,500 if age 50 or older) up to 100% of earned income based on adjusted gross income limits.
- There are no minimum distributions required at any age.
- No age limits on contributions
- Tax-deferred growth.
- Customers with traditional IRAs who have adjusted gross income of less than $100,000 can convert some or all the traditional IRA assets to a Roth IRA if they decide to take advantage of the Roth IRA benefits (amounts converted are taxable in the year they convert).
- A working spouse can make contributions to the Roth IRA of a non- working spouse provided they file a joint tax return.
SEP (Simplified Employee Pension)
A SEP allows a business/employer to make contributions for themselves and their eligible employees into a SEP IRA.
- Maximum contributions - 25% of earned employment income, up to $44,000 for tax year 2006 and $45,000 for tax year 2007.
- Flexibility - Employers can change, or even skip, their contributions to suit their cash flow.
- Simplicity - Employees administer their own SEP-IRAs.
- Relative low cost - No need to hire additional staff to track employee records.
- Employers can deduct contributions to a retirement plan.
- Tax deferred growth.
- Small business owners can use this Plan to contribute to their employees' retirement fund while receiving tax deductions for their businesses. Each employee opens and is responsible for his or her own SEP IRA.
Traditional IRA
IRA allows an individual whether covered by an employer-sponsored retirement plan or not, to save money for use in retirement while allowing it to grow tax deferred. Any individual who has earned income may open a traditional IRA. It is a viable choice if the individual wishes to defer the payment of taxes on funds set aside for retirement.
- Contributions may be deductible (depending on plan participation, adjusted gross income and other limits).
- Tax-deferred growth
- Maximum annual contribution for tax year 2006 and tax year 2007 of $4,000 ($5,000 if age 50 or older) up to 100% of earned income
- No contributions after age 70 1/2.
- Minimum distributions required beginning at age 70 1/2
- Eligible to open IRA at any income level
- A working spouse can make contributions to the IRA of a nonworking spouse provided they file a joint tax return
Citibank, N.A. does not offer tax adivce.
You should consult your tax advisor for your own situation.
*Securities transactions in the Citibank IRA Brokerage account are through Smith Barney, a division and service mark of Citigroup Global Markets Inc., member SIPC. Citigroup Global Markets Inc. and Citibank are affiliated companies under the common control of Citigroup Inc.
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