The IRA turns 50
Once upon a time, there was no such thing as a tax break for individual retirement savings. That was before 1974, before the passage of the Employee Retirement Income Security Act (ERISA).
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The primary purpose of ERISA was make certain that the retirement promises made by private companies to their employees would be kept, and that tax-preferred retirement savings programs would be made available in a nondiscriminatory fashion. But what about those who did not participate in an employer plan? For them, the Individual Retirement Account was created. At that time, up to $1,500 could be contributed by eligible taxpayers to an IRA, and a corresponding deduction taken. The eligibility rules were later loosened in 1981, but the tax deduction was later scaled back for higher-income taxpayers. In 1998, the Roth IRA was introduced, providing for an after-tax savings option with potentially tax-free distributions.
According to the Investment Company Institute’s 2024 Fact Book:
Do you have a question concerning IRAs? Call us at 920-563-6616 ext. 3070, or email wealth@bankwithpremier.com.