Product Taxation at a Glance
|Deductible contributions||Tax-deferred earnings||Age of withdrawal without tax penalty||Age when minimum distribution is required|
|403(b) and 401(k) Retirement Plans||Yes|
(your contributions, not your employer's).
|Traditional IRA||Yes, up to $5,000|
(if 50 or older, up to $6,000) in 2011 and 2012.***
|Roth IRA||No||Yes, and distributions, including earnings, are completely tax free if held five or more years if a distributable event has occurred.||59½, and distributions, including earnings, are completely tax free if held five or more years if a distributable event has occurred. (Contributions may always be withdrawn tax free.)*||N/A|
|529 College Savings Plans||No, but state deductions may be available.||Yes, and qualified distributions, including earnings, are tax free.||Qualified withdrawal rules vary from state to state. Nonqualified withdrawals may be subject to federal and state taxes, and possible recapture provisions for state tax deduction amounts.||N/A|
|Universal Life Insurance||No||Yes||Withdrawals may be made at any time without tax penalty, unless the policy is a modified endowment contract (MEC). Withdrawals and loans from a MEC prior to age 59½ may give rise to an early withdrawal penalty of 10% of the amount subject to tax.||N/A|
|Mutual Funds||No||No||Withdrawals may be made at any time without tax penalty.||N/A|
|*||Withdrawals of earnings are subject to ordinary income tax and a federal 10% penalty may apply prior to age 59½.|
|**||Grandfathered amounts in 403(b) plans not subject to minimum distribution until age 75.|
|***||Deductions are subject to income restrictions if participant or spouse participates in a retirement plan.|
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The tax information contained above is not intended to be used, and cannot be used by any taxpayer, for the purpose of avoiding tax penalties that may be imposed on the taxpayer. It was written to support the promotion of the products and services addressed herein. Taxpayers should seek advice based on their own particular circumstances from an independent tax advisor.
Annuity contracts and certificates are issued by Teachers Insurance and Annuity Association (TIAA) and College Retirement Equities Fund (CREF), New York, NY. After-tax annuities and life insurance issued by TIAA-CREF Life Insurance Co., New York, NY. TIAA-CREF Individual & Institutional Services, LLC and Teachers Personal Investors Services, Inc., members FINRA, distribute securities products.