Hold on to more of your retirement savings

The IRS is starting to pay closer attention to taxpayers who make contribution or withdrawal errors on their IRAs. So make sure you talk to your tax advisor about avoiding IRS penalties, so you can hold on to more of your retirement savings.
While we don’t offer tax advice, we suggest you keep these tips in mind when contributing to or withdrawing from your own IRA:
Follow the 60-day rollover rule
The IRS gives you 60 days to complete a rollover1 when you withdraw funds from any qualified employer plan or other IRA to a new IRA. If you take longer than that, the transaction will be treated as a distribution, and considered taxable income. You could even receive an additional 10% penalty on the withdrawal if you’re younger than 59½.2
Know your contribution limits
If you contribute more than what’s allowed, you could face a 6% penalty if you don’t remove the extra funds right away.
The maximum Traditional IRA or Roth IRA contribution is $5,500 for 2018 and $6,000 for 2019 ($1,000 more if you're age 50 or older).3 If you want to contribute the maximum amount to a Roth IRA, your adjusted gross income (AGI) in 2018 must be below $135,000 if you're single, and $199,000 if you're married, filing jointly. For 2019, AGI must be below $137,000 if you're single, and $203,000 if you're married, filing jointly.
Don’t withdraw funds too early
With Traditional IRAs, any money you earn that’s distributed to you is considered taxable. However, if you take money out of either a Traditional IRA or Roth IRA before you turn 59½ years old, you may face a 10% penalty.
You can access your Roth IRA contributions anytime, tax free. Never pay taxes on earnings when making qualified withdrawals, which are made after five years of first contributing to any Roth IRA and you are either over age 59 ½, disabled, or buying a first home.
If you take money out of either a Traditional IRA or Roth IRA before you turn 59½ years old, you may face a 10% penalty.
Take those required minimum distributions
If you’re age 70½ or older and haven’t taken required minimum distributions from your IRAs or retirement plans, you can face a 50% penalty on the amount you should have withdrawn.
Some exceptions apply, like pre-1987 contributions to a retirement plan, and a retirement plan where you’re still working after age 70½. The rules for required minimum distributions can be complicated, so talk to your tax advisor for additional support.
This material is for informational or educational purposes only and does not constitute investment advice under ERISA. This material does not take into account any specific objectives or circumstances of any particular investor, or suggest any specific course of action. Investment decisions should be made based on the investor’s own objectives and circumstances.
1 Prior to rolling over, consider your other options. You may also be able to leave money in your current plan, withdraw cash or roll over the assets to your new employer’s plan if one is available and rollovers are permitted. Compare the differences in investment options, services, fees and expenses, withdrawal options, required minimum distributions, other plan features, and tax treatment. Speak with a TIAA consultant and your tax advisor regarding your situation. Learn more.
2 Please by advised that you may only complete one 60-day rollover between any of your IRAs in any 365 day period. This IRS rule does not impact direct trustee to trustee transfers between IRAs. For more information please visit www.irs.gov/Retirement-Plans/IRA-One-Rollover-Per-Year-Rule .
3 TIAA-CREF Individual & Institutional Services, LLC, and its affiliates do not offer tax or legal advice services. Individuals should consult with a qualified independent tax advisor, CPA and/or attorney for specific advice based on the individual’s personal circumstances.