Find out why at TOLIC we give you more for your IRA

Frequently asked questions

An annuity is a contract between you and an insurance company, which is designed to increase and protect your money without risk of loss at the end of the chosen term, and offer a guaranteed stream of income for a specific period or for life.

  • Fixed Annuity – your investment grows based on a guaranteed interest rate for a specific term.
  • Indexed Annuity – offers an interest rate tied to the behavior of stock market indexes and the potential to increase earnings based on index growth, and with market downturn protection.
  • Contribution deferral – profits earned are not taxable until the moment when withdrawals or distributions are made.
  • Death Benefits – contributions are generally protected against risk in the event of death.
  • Available as an Individual Retirement Annuity
    • Contributions may be deductible from the income tax return, up to a maximum established by law. *
    • Allows transfers from other IRAs or pension plans. *
  • Partial withdrawals – you can withdraw up to 10% of the premium paid annually, with no fees for early withdrawal or market value adjustment. Subject to a maximum of 50 % in 7 and 10 year annuities.
  • Total distribution – you must wait for the expiration of the contract, depending on the term selected. If you cancel before maturity, you are subject to a penalty and a market value adjustment, whether positive or negative.
  • Guaranteed income benefit for life – endorsement to secure guaranteed lifetime income.
  • To purchase the endorsement, you must be 45 years old; to activate it, you must be 55 years old.
  • The IRA (or Individual Retirement Annuity) is designed to encourage the taxpayer to save and establish a retirement fund.
  • Contributions may be deductible from the income tax return and earnings are not taxed until withdrawals from the account or contract begin.
  • If an IRA withdrawal is made before age 60, you may be subject to a penalty from the Treasury Department of 10 % of the amount of the withdrawal.
  • Any person who receives income from salary, professional services or is self-employed, including any person who participates in another eligible retirement plan.
  • Any person who has not reached the age of 75.
  • Resident of Puerto Rico.
  • You can make annual contributions of up to $5,000 or 100 % of income generated, whichever is lower.
  • Up to $10,000 can be contributed if the return is filed jointly by a married couple (a separate account must be established for each spouse).
  • The contribution limit also applies to the ROTH IRA (non-deductible IRA) and generates exempt interest or profits.
  • After reaching 60 years of age.
  • If the taxpayer has not reached 60 years of age, there is a penalty from the Treasury Department of 10 % of the amount of the withdrawal, except if the taxpayer withdraws for the following reasons:
    • disability
    • job loss
    • payment for children’s university education
    • purchase of the first residence
    • repairs of damage to the main residence caused by hurricane, earthquake, fire or other fortuitous causes
    • computer purchase (limitations apply)
    • terminal illness

Deductible (IRA):

  • maximum contribution of $5,000 per taxpayer
  • the tax advantage is at the moment
  • profits increase by postponing contributions
  • taxpayers who are in higher tax rate benefit more

Non-deducible (ROTH):

  • maximum contribution of $5,000
  • the tax advantage is at the time of retirement
  • withdrawals are exempt from contributions including the principal
  • Yes, it is allowed to transfer funds from a qualified plan to an IRA and from one IRA to another IRA.
  • Example: 401K, 1165e, pension plans, Keogh
  • to consolidate IRAs

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En TOLIC tenemos la obligación de enviar la Informativa 480.7F, a todos los clientes comerciales y cuenta propistas, para los pagos de prima de Aportaciones a planes de salud o accidentes durante el año Contributivo 2023.

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