The Wing
Investment Advice for Every Generation
Vorpahl Wing Securities
IRAs (Individual Retirement Account)

"A tax-deferred retirement account for an individual that permits individuals to set aside money each year, with earnings tax-deferred until withdrawals begin at age 59 1/2 or later (or earlier, with a 10% penalty). The exact amount depends on the year and your age. IRAs can be established at a bank, mutual fund, or brokerage. Only those who do not participate in a pension plan at work or who do participate and meet certain income guidelines can make deductible contributions to an IRA. All others can make contributions to an IRA on a non-deductible basis. Such contributions qualify as a deduction against income earned in that year and interest accumulates tax-deferred until the funds are withdrawn. A participant is able to roll over a distribution to another IRA or withdraw funds using a special schedule of early payments made over the participant's life expectancy."

Withdrawals prior to 59 1/2 years of age may be subject to a 10 percent Federal tax penalty.

(Quoted from: IRA. InvestorWords.com. Retrieved July 7, 2008, from InvestorWords.com.)


INHERITED IRAs (Individual Retirement Accounts)

"An IRA that becomes the property of someone other than the spouse of the deceased owner of the IRA. Inherited IRAs are subject to special regulations. The beneficiary receives the distribution by December 31 of the fifth year after the death of the owner. In addition, this type of IRA does not allow for tax deduction contributions and rollovers to and from other IRAs. The IRA can also be paid as an annuity or in periodic installments not extending beyond the beneficiary's life expectancy."

Withdrawals prior to 59 1/2 years of age may be subject to a 10 percent Federal tax penalty.

(Quoted from: inherited IRA. InvestorWords.com. Retrieved July 7, 2008, from InvestorWords.com.)


ROTH IRAs (Individual Retirement Accounts)

"A new type of IRA, established in the Taxpayer Relief Act of 1997, which allows taxpayers, subject to certain income limits, to save for retirement while allowing the savings to grow tax-free. Taxes are paid on contributions, but withdrawals, subject to certain rules, are not taxed at all."

(Quoted from: Roth IRA. InvestorWords.com. Retrieved July 7, 2008, from InvestorWords.com.)


SEP IRAs (Simplified Employee Pension Individual Retirement Accounts)

"A retirement program for self-employed people or owners of small companies allowing them to defer taxes on investments intended for retirement."

Withdrawals prior to 59 1/2 years of age may be subject to a 10 percent Federal tax penalty.

(Quoted from: Simplified Employee Pension IRA. InvestorWords.com. Retrieved July 7, 2008, from InvestorWords.com.)


SIMPLE IRAs (Savings Incentive Match Plan for Employees Individual Retirement Accounts)

"A retirement plan sponsored by companies with fewer than 100 employees which is attractive for employers because it avoids some of the administrative fees and paperwork of plans such as a 401(k) plan. A SIMPLE plan may be structured as a 401(k)."

Withdrawals prior to 59 1/2 years of age may be subject to a 10 percent Federal tax penalty.

(Quoted from: Savings Incentive Match Plan for Employees. InvestorWords.com. Retrieved July 7, 2008, from InvestorWords.com.)


401(k)s

"A defined contribution plan offered by a corporation to its employees, which allows employees to set aside tax-deferred income for retirement purposes, and in some cases employers will match their contribution dollar-for-dollar. Taking a distribution of the funds before a certain specified age will trigger a penalty tax. The name 401(k) comes from the IRS section describing the program."

(Quoted from: 401(k) plan. InvestorWords.com. Retrieved July 7, 2008, from InvestorWords.com.)


INDIVIDUAL 401(k)s

An individual 401(k) has all the advantages of a 401(k), except that it is designed specifically for owner-only small businesses.

Withdrawals prior to 59 1/2 years of age may be subject to a 10 percent Federal tax penalty.