Your Payroll-Deducted IRA
It's always been smart to save money with an Individual Retirement Account (IRA), and now it makes even more sense! Your Professional Employer Organization and SMF are ready to open your "Payroll-Deducted" Traditional or Roth IRA. By simply completing the forms enclosed: an application for your selected Mutual Fund Family and a Payroll-Deducted IRA Enrollment Form, deductions from your paycheck can start in a matter of weeks! All contributions are after tax contributions.
Each employee may contribute a minimum of $1,200 per year ($100 per month minimum per person) up to the maximum annual limit of $5,000 ($416.66 per month). If you are married, you may have additional deductions taken from your paycheck for a spousal IRA (minimum of $1,200 and maximum $5,000 per year. Employee's age 50 and older can take advantage of the IRA Catch Up Provision which will allow them to contribute an additional $1,000 for a total contribution of $6000 for 2008. Just simply complete an additional fund application. Contact Paula Post at (800) 356-3009x1015 and we will send the form to you, or you may download the application from our web site: www.slavic.net.
You can now also invest in an Education IRA, which allows parents, grandparents, relatives and friends make nondeductible contributions up to $2,000 annually for a child under the age of 18. Contributions are not permitted after the child's 18th birthday. The IRA savings must be used by the time the beneficiary is age 30, or may then be rolled over to an Education IRA for another eligible beneficiary in the same family. Withdrawals from an Education IRA used to pay for qualified elementary, secondary and higher education expenses such as room and board, books and tuition and are generally tax-free. Distributions of income from the account not used for qualified educational expenses are included as income for tax purposes and are subject to the 10% penalty tax.
Each employee can choose the Traditional or Roth. In addition, they cal also elect an Education IRA for their contributions. All payroll deductions are AFTER TAX. The amount deducted from your paycheck may be a tax-deductible contribution based on a) whether you or your spouse are contributing to a retirement plan or b) the total combined earnings filed on your income tax return. The earnings from the traditional IRA grow tax-deferred. The Roth and Education IRAs are also after-tax contributions. These contributions are not tax deductible, but grow tax-free if certain conditions are met. The qualifications for both the Traditional and Roth IRA's are explained in the enclosed materials.
To have your deductions begin, you need to:
- Complete an IRA Information Sheet. Fax or mail this form to Paula Post at 1-561-241-1070. That will then generate the actual Enrollment package to be sent to your home address for completion.
- Complete and sign the Payroll-Deducted IRA Enrollment Form. Once this form is received by us, we will then send you the appropriate IRA application.
- Complete and sign the IRA Application. Make sure you complete all highlighted sections of the application, including whether you are selecting a Traditional or Roth and/or Education IRA and the mutual fund you choose to have your contributions invested in. The fund performance history is also included to assist in making your selection. Once your IRA application is received back by us, we will forward it to the fund company. Approximately five business days later we will receive your account number and can then send your Enrollment Form to PEO so that they can begin deducting your contributions.
The only cost to you, other than the standard custodial fee, (see fund prospectus.) is $10 per year to process and maintain your account through payroll. This fee is deducted from your first contribution and yearly thereafter in the anniversary month of your first contribution.
We are pleased to provide this service to you as an employee of your Professional Employer Organization. Please contact our Customer Service Department or Paula Post at (800) 356-3009x1015 if you have any questions. We are here to serve you and your financial needs.
