self-directed traditional ira - hilliard lyons

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hilliard.comJ.J.B. Hilliard, W.L. Lyons, LLC | Member NYSE, FINRA, & SIPC

hilliard.com

Contact your Wealth Advisor for more details.

This document answers some of the most frequently asked Traditional IRA questions and will give you insight into a Hilliard Lyons Self-Directed Traditional IRA. Your Hilliard Lyons Wealth Advisor will provide you with ideas for your Traditional IRA and details on establishing an account.

Establishing a Traditional IRA

Q :  Who is eligible for a Traditional IRA?

A: �� �Everyone�who�is�under�the�age�of�70½�and�receives�earned�income�in�the�form�of�salary,� fees,�bonuses,�commissions�or�alimony.

Q : �� �I�participate�in�a�retirement�plan�through�my�employer.�Do�I�still�qualify�to�make�a�Traditional�IRA�contribution?

A:� �Yes.�You�can�still�contribute�annually�to�a�Traditional�IRA.�However,�a�full�tax�deduction�may�not�be�available,�depending�on�your:

■ Active�participation�in�an�employer-sponsored�retirement�plan�

■ Modified�adjusted�gross�income

■ Tax�filing�status

� �� �In�prior�years,�you�may�have�had�some�or�all�of�your�deductible�Traditional�IRA�contributions�phased�out�if�you�(or�your�spouse)�participated�in�an�employer-sponsored�retirement�plan,�and�you�had�adjusted�gross�income�above�a�certain�amount.�Today,�if�you�are�actively�participating�in�an�employer-sponsored�plan�and�your�spouse�is�not,�your�spouse�may�make�a�fully�deductible�Traditional�IRA�contribution�as�long�as�your�joint�MAGI�does�not�exceed�$189,000�for�2018.�The�deduction�is�completely�phased�out�with�MAGI�of�$199,000.� This�is�known�as�the�“spousal�de-link.”

Self-Directed Traditional IRA

hilliard.comJ.J.B. Hilliard, W.L. Lyons, LLC | Member NYSE, FINRA, & SIPC

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Self-Directed Traditional IRA

IRA Deductibility Thresholds Expanded*

Single Married2018 >$63k - <$73k >$101k - <$121k

*For�individuals�and�married�couples�filing�jointly�who�are�active�participants�in�an�employer�sponsored�retirement�plan.

Q :  �What�are�my�potential�tax�advantages�with�a�Traditional�IRA?

A:� �Contributions�are�tax�deductible�from�your�gross�income,�if�you�qualify.�Regardless�of�the�tax�deductibility�of� your�contribution,�all�taxes�are�deferred�on�all�investment�gains,�dividends�and�interest�until�withdrawn.

Contributing to Your Traditional IRA

Q : ��How�much�can�I�contribute�each�year?�

A:� �For�2016,�you�can�contribute�and�deduct,�if�you�qualify,�$5,500**�or�100%�of�compensation,�whichever�is�less.�Married�couples�can�contribute�a�total�of�$11,000� ($5,500�to�each�in�separate�accounts).

Q : ��What�if�I�work�only�part�time?

A:� �You�can�contribute�up�to�100%�of�your�earned�income� up�to�$5,500.** **Contribution�limit�is�increased�to�$6,500�for�individuals�50�or�older.

Q : �� �Can�I�have�a�Traditional�IRA�if�my�only�source�of�income�is�from�investments?

A:� �No.�You�are�eligible�to�make�contributions�only�if�you�have�earned�income�from�salary,�fees,�bonuses,�commissions�or�alimony.

Q :  When�are�my�contributions�due?

A: ��Contributions�may�be�made�at�the�start�of�the�tax�year,�Jan.�1,�if�you�wish.�An�early�contribution�allows�you�to�take�full�advantage�of�tax�deferral�and�compounding�of�tax-deferred�earnings.�You�must�make�your�contribution�no�later�than�April�15�of�the�following�year.

Q : ��Must�I�contribute�to�my�Traditional�IRA�each�year?

A:  � �No.�Annual�contributions�are�voluntary.�If�you�skip�a� year�or�do�not�wish�to�make�the�maximum�contribution� in�any�year,�you�cannot�contribute�more�than�the� annual�maximum�to�catch�up.

Q : ��Must�I�contribute�only�cash?

A:�� �Yes,�unless�you�are�establishing�a�rollover�Traditional�IRA�with�investments�from�a�former�employer’s�retirement�program,�or�consolidating�the�assets�of�other�IRAs.

Q : �� �Can�I�include�alimony�payments�when�determining�allowable�contributions?

A:�� �Yes.�Alimony�will�qualify�as�compensation�for�calculating�contributions.

Q :  � �My�spouse�is�not�employed.�Can�she/he�participate?

A:� �Yes.�You�may�open�a�Traditional�IRA�for�your�unemployed�spouse�who�is�under�age�70½.�The�maximum�contribution�to�the�account�is�the�lesser�of�$5,500�or 100%�of�the�working�spouse’s�compensation.�The�maximum�allowable�annual�contribution�for�a�married�couple�is�$11,000�($5,500�each�in�separate�accounts).

Q : �� �My�spouse�has�limited�income�of�less�than�$250�per�year.�Can�he/she�still�qualify�for�a�spousal�Traditional�IRA?

hilliard.comJ.J.B. Hilliard, W.L. Lyons, LLC | Member NYSE, FINRA, & SIPC

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Self-Directed Traditional IRA

A:� �Yes.�However,�your�spouse�must�choose�to�be�treated� as�having�no�income�during�the�tax�year.

Hilliard Lyons Self-Directed Traditional IRA

Q : �� �What�investments�can�I�make�in�Hilliard�Lyons� Self-Directed�Traditional�IRA?

A:� �A�significant�advantage�of�a�Hilliard�Lyons�Self-Directed�Traditional�IRA�is�flexibility.�Depending�on�your�investment�objectives,�you�may�choose�to�invest�in�stocks,�bonds,�U.S.�Government�securities�and�mutual�funds.�In�addition,�you�may�write�covered�call�options�and�buy�put�options�to�protect�existing�stock�positions.�Your�Hilliard�Lyons�Wealth�Advisor�offers�up-to-date�research�information.� You�may�trade�in�the�Hilliard�Lyons�Self-Directed�Traditional�IRA�account,�as�you�would�in�a�regular�account,�with� no�limit�on�the�number�of�buys�or�sells�made�in�any� time�period.

Q : �� �Does�Hilliard�Lyons�manage�my�Self-Directed�Traditional�IRA?

A:� �No.�As�owner�of�the�account,�you�manage�it.�Hilliard�Lyons�helps�by�providing�research�information�and�keeping�custody�of�the�securities.�Annual�reports�will�be�provided�showing�contributions�and�withdrawals.�However,�you�make�any�decisions�to�buy�or�sell�securities.

For Additional Help

This�piece�is�a�general�discussion�of�the�Traditional�Individual�Retirement�Account.�For�more�information,�please�consult�your�tax�advisor.�Your�Hilliard�Lyons�Wealth�Advisor�will�be�pleased�to�make�an�appointment�to�discuss�any�questions�you�may�have�regarding�specific�investments.

Securities�and�advisory�services�offered�through�J.J.B.�Hilliard,�W.L.�Lyons,��LLC,�a�registered�investment�advisor�and�broker�dealer.�Member�NYSE,�FINRA�&�SIPC.��Investing�in�securities�involves�risk,�including�possible�loss�of�principal.�©2018.�All�rights�reserved.

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