What is a Traditional IRA?
The Mutual of America Traditional IRA provides certain tax advantages when you set aside a portion of your earnings to build your retirement income. IRAs are individually owned variable annuity contracts that are available to all working and self-employed people and do not require employer sponsorship. If you satisfy certain income requirements, your contributions to a Traditional IRA are tax deductible. If you are not entitled to a tax deduction, you may make nondeductible contributions.Who's eligible?
- If you are employed and have earned income, you may currently contribute up to $6,000 (but not more than 100% of your compensation) to a Mutual of America Traditional IRA.
- If your spouse is not working, you may also be able to establish a spousal IRA and contribute up to an additional $6,000 per year.
- Your income and whether or not you or your spouse are active participants in certain tax-qualified retirement plans will determine if you can deduct any, all or part of your IRA contributions from your federal taxes. Learn about tax advantages.
Currently, the annual dollar limit for contributions and deductions to a Traditional IRA is limited to $6,000 or 100% of compensation, if less. Rules limiting or eliminating deductions for active participants in employer retirement plans based on federal adjusted gross income (AGI) levels apply to these limits.
The annual dollar limitation increase for year 2021 and subsequent years is $6,000 indexed for inflation in $500 increments.
REMINDER: Indexing does not automatically increase the limit each year; increases only apply when the inflation-adjusted limit equals or exceeds the next incremental amount.
Age 50 "catch-up" contributions
The dollar limits (before any phase-out based on the modified AGI) are further increased by an additional amount for individuals who are age 50 or older at any time during the year (i.e., attain age 50 by December 31).
- $6,000 for individuals under age 50
- $7,000 for individuals age 50 or older
NOTE: Although the additional limit increase for 50-year-olds is referred to as a "catch-up" contribution limit, it does not require that the individual has contributed less than the maximum limit in prior years as other, traditional catch-up contribution rules do. The full additional age 50 contribution can be made even if maximum contributions have always been made in all prior years, subject to phase-out rules based on AGI.
Mutual of America's IRAs are individual variable annuity contracts and are suitable for long-term investing, particularly for retirement savings. The value of a variable annuity contract will fluctuate depending on the performance of the Separate Account investment funds you choose. Upon redemption, you could receive more or less than the principal amount invested. A variable annuity contract provides no additional tax-deferred treatment of benefits beyond the treatment provided to any qualified retirement plan or IRA by applicable tax law. You should consider a variable annuity contract’s other features before making a decision.Form IRA-2004 or applicable state variation.