First Republic Private Wealth Management includes First Republic Trust Company; First Republic Trust Company of Delaware LLC; First Republic Investment Management, Inc., an SEC-Registered Investment Advisor; and First Republic Securities Company, LLC, Member FINRA/ SIPC.
Contributions to a traditional IRA reduce your AGI (Adjusted Gross Income) and lower your taxes. Your contribution must be made by April 15 following the tax year to be deductable. Contributions to a Roth IRA do NOT reduce AGI and do not lower your current taxes.
Another advantage over a Roth IRA is the higher contribution limit. You may contribute as much as 25 percent of your annual income, up to $50,000 cap, in 2012. Because these contributions are made on a pretax basis, however, once you reach retirement age -- at least 59 1/2 -- you pay income tax on all distributions.f you are self-employed and have no other employees or high employee turnover, a SEP IRA may be a good solution for your retirement needs. A SEP allows you to make pretax contributions similar to a traditional IRA, which reduces your taxable income rather than after-tax contributions like a Roth IRA.