Individual Investors

Investors' Knowledge Base

Retirement Center

 

Today there are more retirement planning options available than ever before. But how do you know which one is right for you? Or how much you should save in the first place? Take advantage of these resources to help you invest successfully to reach your retirement goals.

Retirement planning has changed significantly since your grandparents and parents retired in the 1960's, 1970's, even the 1980's.

Higher contribution limits and tax advantages make IRAs a more valuable way to save. Review the features of the IRAs that Virtus Investment Partners Funds offer to see which one is best for your financial situation.




Traditional IRA

Plan description

  • An individual retirement plan that permits tax-deferred savings for individuals under the age 70½.

Key features

  • Contributions are allowed regardless of the individual's adjusted gross income.
  • Contributions may be deductible. Tax deductibility of contributions depends on salary level and whether the IRA owner or spouse participates in an employer-sponsored retirement plan.
  • Earnings on both deductible and nondeductible contributions accumulate on a tax-deferred basis.
  • Any withdrawals made prior to age 59½ will be taxed as ordinary income and may be subject to a 10% penalty.

Who can establish

  • Anyone with earned income before the tax year in which age 70½ is attained.
  • For married couples filing jointly, a nonworking spouse may also fund an IRA based on the earned income of the working spouse (up to the annual limit).

Annual contributions 

  • 2014 and 2015 Contribution Annual Limit: $5,500 ($6,500 if age 50 or older). Prior year contributions must be made by the tax filing due date (not including extensions), normally April 15th.
  • Contributions to a Traditional IRA in aggregate cannot exceed the annual limit.

Click here to access the Retirement Plan Calculators

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Roth IRA

Plan description

  • An individual retirement plan that permits tax-free earnings and distributions.

Key features

  • Contributions are nondeductible, but qualified distributions are tax free.
  • Permits tax and penalty fee withdrawals of earnings after five years from the date of your first Roth contribution and attaining age 59 1/2.
  • Permits tax-free and penalty-free withdrawals of contributions at any time.
  • Contributions allowed after age 70½.
  • Traditional IRAs held at Virtus Investment Partners Funds or elsewhere may be converted to a Roth IRA by filling out a Virtus Investment Partners Funds Roth IRA Application and a Conversion Form.

Who can establish

  • Anyone with earned income that does not exceed the following annual adjusted gross income (AGI) limits:
      • For 2014, $129,000 for single tax filers.
      • For 2015, $131,000 for single tax filers.
      • For 2014, $191,000 for joint tax filers and qualifying widow(er).
      • For 2015, $193,000 for joint tax filers and qualifying widow(er).
  • For married couples filing jointly, a non-working spouse may also fund an IRA contribution based on the earned income of the working spouse (up to $5,500 in 2014 and 2015, $6,500 if age 50 or older).
  • Anyone converting a Traditional IRA to a Roth IRA.

Annual Contributions

  • 2014 and 2015 Contribution Annual Limit: $5,500 ($6,500 if age 50 or older). Prior year contributions must be made by the tax filing due date (not including extensions), normally April 15th.
  • Contributions to a Roth IRA and a Traditional IRA in aggregate cannot exceed the annual limit.

Click here to access the Retirement Plan Calculators.

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IRA Rollover

Plan description

  • An individual retirement plan for retirement assets rolled over from other eligible retirement plans.

Key features

  • Direct Rollovers: An eligible rollover distribution from an eligible plan that is made payable to the custodian of the accepting Rollover IRA.
  • Indirect Rollovers: An eligible rollover distribution from an eligible plan that is made payable to you and is reinvested in a Rollover IRA within 60 days of receipt.
  • Beginning in 2015, you can make only one rollover from an IRA to another (or the same) IRA in any one-year period, regardless of the number of IRAs you own. The limit will appy by aggregating all of an individual's IRAs, including SEP and SIMPLE IRAs as well as Traditional and Roth IRAs, effectively treating them as one IRA for purposes of the limit. However, trustee to trustee transfers between IRAs are not limited and rollovers from Traditional IRAs to Roth IRAs (conversions) are not limited. 

Who can establish

  • Anyone who receives an eligible rollover distribution.

Click here to access the Retirement Plan Calculators

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SEP IRA

Plan description

  • A SEP IRA plan (Simplified Employee Pension Plan) is a low-cost retirement plan for small business owners and the self-employed. In a SEP, you set up an IRA for each eligible employee and make tax-deductible contributions into each account. Earnings are tax deferred.

Key features

  • High contribution limits. With a SEP, you can contribute up to the lesser of 25% of compensation or $52,000 in 2014 and $53,000 in 2015. (The limit for a Traditional IRA for 2014 and 2015 is $5,500, $6,500 if age 50 or older.) If you are self employed, see IRS Publication 560, as special rules apply.
  • Easy to set up and operate. No required IRS filings.
  • Tax deduction. The deduction allowed for employer contributions can save your business money each year by reducing your tax liability.
  • Flexibility. You decide amount and frequency of contributions, and you're not required to contribute every year.
  • Immediate ownership. All contributions are immediately 100% vested.
  • Participant-directing investing. Employees can create their own portfolios using any of our funds.

Who can establish

  • Sole proprietors, partnerships, corporations, corporations and nonprofit groups. Consider a Virtus Investment Partners Funds SEP Plan if you are a business owner or self-employed person who wants to:
    • Close the gap between Social Security income and retirement expenses.
    • Reduce tax bills.
    • Have a retirement plan that offers tax-deferred compounding of earnings.
    • Attract and retain valuable employees.

Eligible employees

  • You are only required to contribute for employees who are:
    • Age 21 or older.
    • Have earned at least $550 in 2014 ($600 in 2015).
    • Have worked for you for three of the last five years.
    • You may designate less restrictive requirements at your discretion.  

Annual contributions

  • Employers contribute up to the lesser of 25% of an employee's eligible compensation or $52,000 in 2014 and $53,000 in 2015. (Maximum considered compensation is $260,000 in 2014 and $265,000 in 2015).

Click here to access the Retirement Plan Calculators

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SIMPLE IRA

Plan description

  • SIMPLE stands for Savings Incentive Match Plan for Employees. It's a payroll deduction plan that permits an employee to make pre-tax salary deferral contributions in addition to the employer's contribution.

Key features

  • Inexpensive 401(k)-type plan for the small business owner.
  • No 401(k)-type discrimination testing.
  • Deductible employer contributions are made directly to employees' IRAs.
  • Employer has the flexibility to choose between two contribution options.
  • Employer contributions are mandatory.
  • All contributions must be 100% immediately vested.

Who can establish

  • Self-employed persons, partnerships, corporations, nonprofit, tax-exempt and governmental entities with 100 or fewer employees. Generally, the employer may not maintain another plan.

Annual contributions

  • Who contributes: employee and employer.
  • Employees can defer compensation up to $12,000 for 2014 and $12,500 for 2015 (Participants age 50 or older by the end of the year can contribute and additional $2,500 in 2014 and $3,000 in 2015).
  • Employer must choose one of two options:
  • Match employee's contribution dollar for dollar, up to 3% of compensation (not exceeding the deferral limit). In two years of any five year period, the match can be reduced to 1% of compensation.
  • Contribute 2% of each eligible employee's compensation (compensation is limited to $260,000 in 2014 and $265,000 in 2015.)

Click here to access the Retirement Plan Calculators

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Profit Sharing Plan

Plan description

  • A plan that allows for discretionary annual contributions by the employer.

Key features

  • Employers can vary the amount they contribute in a Profit Sharing Plan.
  • Vesting schedule is determined by employer.
  • Withdrawals are governed by the plan document and may be restricted.
  • Employers may offer participant loans.

Who can establish

  • Self-employed persons, partnerships, corporations, corporations and nonprofit groups.

Annual contributions

  • Up to 25% of eligible compensation or $52,000 per employee in 2014 and $53,000 in 2015. Total employer contribution cannot exceed 25% of total eligible compensation.
  • Maximum eligible compensation: $260,000 in 2014 and $265,000 in 2015.

Click here to access the Retirement Plan Calculators

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