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Boost your IRA Retirement Returns

by Uncle Bob Williams

You can maximize your IRA retirement profits by trading conservative option Condor spreads on cash settled Indexes like the SPX, RUT and NDX.

The Uncle Bobs Money Conservative Portfolio, for example is perfect for IRA Options trading: we only trade Condor spreads on cash settled Indexes.

Below are the basic IRA rules and guidelines, and below that you will find a list of popular Options Brokers with information about their IRA Options trading rules.

Traditional vs. Roth IRAs

 

Traditional IRA

Roth IRA

General Features

Traditional IRAs are available in two flavours; deductable and non-deductable.
Contributions to deductable IRAs are tax deductable. However, you mustn't already have a 401(k) with your employer.
Contributions to non-deductable IRAs are not tax deductable but can be used in conjunction with a 401(k).
Withdrawals after the age of 59 1/2 are subject to income tax at the standard rate.
Roth IRA contributions can be withdrawn at any time for any reason without penalty.
Withdrawals after the age of 59 1/2 are tax free so long as the money has been in the account for at least five years.

How much can I contribute?

Currently: $5,000 ($10,000 for married couples into two separate IRAs). If you're over 50, you can contribute an extra $1,000 per year. IRA allowances calculator
Who can contribute?

Anyone over 18 with earned income. Anyone over 18 earning between $110,000-$125,000 (single) or less than $173,000 (married, filing jointly) contributions are reduced for married couples earning between $173,000-$183,000 as per IRS guidelines.
Contribution Deadline April 15th of that tax year.
When must I stop contributing? Age 70 1/2 No limit.
Is my money tax deferred or tax free? Your money grows tax deferred. Your money grows tax free.
When can I start withdrawing funds without penalty?

Beginning at age 59 1/2. Earlier if used for home purchase, college expenses or major medical expenses.

Earnings can be withdrawn without penalty so long as the money has been in the account for at least five years or when you reach age 59 1/2.

When must I begin withdrawing money?

Age 70 1/2.

No requirement.

How are my withdrawals taxed?

Ordinary income taxes are payable at withdrawal at the standard rate.


Withdrawals made before you reach 59 1/2 will be subject to federal income tax and a 10% IRS penalty.

Contributions can be withdrawn tax free if the account has been open for five years and you're 59 1/2 years of age.

 

Earnings withdrawn before both of these criteria are met, may be subject to federal income tax and a 10% IRS penalty.



IRA Broker Information

Broker

Allows Option Trades Within IRA *

Are Credit Spreads Allowed? **

IRA Maintenance Fees

Minimum Balance

IRA Rules / Regulations

eOption

Yes check

Yes check

N/A

$5000

Rules

E*Trade

Yes check

Yes check

N/A

$0

Rules

Fidelity

Yes check

Yes check

N/A

$2500

Rules

Interactive Brokers

Yes check

Yes check

$7.50/qtr

$5000

Rules

Options House

Yes check

Yes check

N/A

$1000

Rules

OptionsXpress

Yes check

Yes check

N/A

$200

Rules

Schwab

no

no

N/A

$1000

Rules

Scottrade

Yes check

Yes check

N/A

$500

Rules

TDAmeritrade / ThinkorSwim

Yes check

Yes check

N/A

$0

Rules

Trade King

Yes check

Yes check

N/A

$0

Rules

Trade Station

Yes check

Yes check

$35.00

$5000

Rules

TradeMonster

Yes check

Yes check

N/A

$2000

Rules

* You must be approved for level 4 options trading by your broker before you can trade options within your IRA.

** Credit spreads may only be traded on European style cash settled indices.

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