Retirement Planning Options

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.

In accordance with the provisions of SECURE 2.0, signed into law on December 29, 2022, IRAs and other retirement plans will undergo a variety of regulatory changes within the coming years. Most immediately, for tax year 2023 and following, individuals born in 1951 and later not need to begin required minimum distributions until the year in which age 73 is attained. For more information on how this or other SECURE 2.0 provisions may impact you personally, please consult with your financial or tax professional.

Higher contribution limits and tax advantages make IRAs a more valuable way to save. Review the features of the IRAs that Virtus 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.

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.
  • 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 

  • 2023 Contribution Annual Limit: $6,500 ($7,500 if age 50 or older).
  • 2024 Contribution Annual Limit: $7,000 ($8,000 if age 50 or older).
  • Contributions allowed after age 70½.
  • 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.

Retirement Plan Calculators

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 59½.
  • Permits tax-free and penalty-free withdrawals of contributions at any time.
  • Contributions allowed after age 70½.
  • Traditional IRAs held at Virtus 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 2023, $153,000 for single tax filers.
    • For 2024, $161,000 for single tax filers.
    • For 2023, $228,000 for joint tax filers and qualifying widow(er).
    • For 2024, $240,000 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 $6,500 in 2023 ($7,500 if age 50 or older); $7,000 in 2024 ($8,000 if age 50 or older).
    • Anyone converting a Traditional IRA to a Roth IRA.

    Annual Contributions

    • 2023 Contribution Annual Limit: $6,500 ($7,500 if age 50 or older).
    • 2024 Contribution Annual Limit: $7,000 ($8,000 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.

    Retirement Plan Calculators

    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.
    • 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 apply 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.

    Retirement Plan Calculators

    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 $66,000 in 2023 and $69,000 in 2024. 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 Fund 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 $750 in 2023; $750 in 2024.
      • 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 $66,000 in 2023 and $69,000 in 2024. (Maximum considered compensation is $330,000 in 2023 and $345,000 for 2024).

    Retirement Plan Calculators

    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 $15,500 for 2023 and $16,000 for 2024. (Participants age 50 or older by the end of the year can contribute an additional $3,500 in 2023 and $3,500 for 2024).
    • 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 $330,000 in 2023; $345,000 for 2024.)

    Retirement Plan Calculators

    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 $66,000 in 2023 and $69,000 in 2024. Total employer contribution cannot exceed 25% of total eligible compensation.
    • Maximum eligible compensation: $330,000 in 2023 and $345,000 in 2024.

    Retirement Plan Calculators