In this article we outline the most frequently encountered IRA accounts seniors may own. We share thoughts you may want to consider with your advisors as you decide how to best fund your Entry Fee in your CCRC or Life Plan Community.

While this page is not tax or financial advice, it is meant to give you a good baseline for a conversation with financial professionals who specialize in tax and retirement account management.  A few hours of time with a tax or other licensed financial professional could save you a lot of money in unexpected tax consequences.

Please be sure to read the important disclaimer at the bottom of this page.

Overview of IRA accounts

If you are thinking of ways to finance a move to a Life Plan Community or CCRC, you may be considering accessing the funds you have accumulated in an IRA. Your IRA, or Individual Retirement Account, can take many forms, including a Traditional IRA, a Roth IRA, a SEP-IRA, a SIMPLE IRA, a Rollover IRA, a Spousal IRA, a Payroll Deduction IRA, a Self-Directed IRA, or a Nondeductible IRA. Different rules apply depending on the type of IRA you have. If one of the following descriptions apply to your IRA, follow the associated link for more information.

Do all IRA Accounts have the same rules?

Different rules apply depending on the type of IRA you have. If one of the following descriptions apply to your IRA, follow the associated link for more information.

Before making withdrawals, understand which IRA type you own.

1. Traditional IRA

Contributions are tax-deductible; earnings are tax-deferred until withdrawal; withdrawals taxed as ordinary income

2. Roth IRA                   

Contributions are not tax-deductible; earnings and withdrawals are tax-free

3. SEP-IRA

Employer contributes to a Traditional IRA in the employee’s name

4. SIMPLE IRA 

Employer and Employee contributions to an IRA

5. Rollover IRA

A tax-free distribution from one retirement plan to another retirement plan

6. Spousal IRA

Working spouse contributes to an IRA for a nonworking spouse

7. Payroll Deduction IRA

Employer set up IRA and employee authorizes payroll deductions

8. Self-Directed IRA

An IRA that can hold alternative investments

9. Nondeductible IRA 

An IRA funded with after-tax dollars that is not a Roth IRA

 

Important Disclaimer

The information in this page is not meant to serve as financial, tax, or personal financial planning advice.  No decisions should be made from reading the information on this page.  Decisions should be made after careful analysis and consultation with your financial, tax, accounting, or other professional advisor licensed to provide retirement advice.