Man and pregnant woman with child

The Ps and Qs of IRAs

Jul 16, 20207/16/2020

Learning Center


Wealth & Giving

Saving for retirement is important. An IRA could be what you’re looking for. An IRA is a way to set aside money for retirement and also provides income tax advantages.

“IRA” stands for:

  • Individual Retirement Account1 – security stocks, bonds and mutual funds may be placed in this type of account; or
  • Individual Retirement Annuity – purchased annuities may be placed in this type of account.

Find Your Type

There are many types of IRAs, each with their own tax advantages, including traditional, Roth, Educational, SEP, and SIMPLE. Two of the most common are:

  • Traditional IRA – allows you to deduct eligible contributions.
    • To contribute to a traditional IRA, you (or you and your spouse if you file your taxes jointly) must have taxable compensation during the year you make contributions; and
    • You must be under age 70-1/2 by the end of the year in which you make contributions.
  • Roth IRA – The taxable income requirements are the same as for the traditional IRA, but the Roth does not allow you to deduct contributions you make. The Roth’s advantages come later: your earnings and gains may be completely tax-free when distributed.

IRA Requirements

There are certain requirements that apply to both traditional and Roth IRAs:

IRA Compensations

Taxable compensation that is eligible for an IRA includes:

  • Wages
  • Salaries
  • Tips
  • Commissions
  • Self employment income
  • Non-taxable combat pay
  • Alimony and separate maintenance

Taxable income that is not eligible for an IRA includes:

  • Earnings and profits from property
  • Interest and dividend income
  • Pension or annuity income
  • Deferred compensation
  • Income from certain partnerships

Contribute on Time

The deadline to contribute to an IRA is any time during the year, or up until April 15 the following year. But keep in mind, the sooner you open an IRA and begin making contributions, the longer your money will have to grow, potentially leaving you with a better end result.

Note: If you are over age 50, you may be able to make an additional catch-up contribution after making your maximum annual contribution. Refer to the IRS website or talk with your professional tax advisor to see if you’re eligible.

Convert if it’s Right

Converting a traditional IRA to a Roth IRA, simply put, is a way to pay income taxes now and avoid paying them later. As of Jan. 1, 2010, income restrictions on converting most pre-tax retirement accounts to Roth IRAs have been removed. Any tax incurred on a conversion is paid in the year of conversion.

To be eligible for a Roth IRA conversion, you must file as single or married filing jointly.

Plan What Works for You

WoodmenLife offers several options to help you save for retirement. Talk with your local WoodmenLife Representative to determine whether an IRA is right for you and your retirement goals.


  1. Investing in variable products involves risk, including the possible loss of principle. Early withdrawals may be subject to surrender charges and taxed as ordinary income, and, in addition, if taken prior to age 59½, an additional 10% federal income tax penalty may apply. Withdrawals reduce annuity contracts benefits and values. You should consider the investment objectives, risks, charges, and expenses of variable annuities and mutual funds before investing. Call Woodmen Financial Services, Inc. at 1-877-664-3332 for a copy of the prospectus, which contains this and other information about the annuity or mutual fund. You should read the prospectus carefully before investing.
130 years strong shield with words 130 years strong with stars

We’ve been helping to protect the financial future of families like yours, making a difference in hometowns across America and honoring our country since 1890. As a not-for-profit life insurance company, we put money back into the community. We’re here when you need us most.

Learn More About WoodmenLife

Connect With WoodmenLife

Fill out the form below to have your local Representative contact you about our life insurance and retirement products, or about getting involved in our local community service efforts.

To protect your privacy, we do not provide quotes over email.

  • Required
  • Required
  • Required ###-###-####
  • Required #####
  • Optional

This is a solicitation of insurance and an agent may contact you. By submitting the above request, I consent to receive phone calls from a licensed insurance producer on behalf of Woodmen of the World Life Insurance Society (WoodmenLife) and its affiliates at the phone number(s) above regarding WoodmenLife products and services. I understand that I can contact a Sales Representative directly to make a purchase.

Customer Service: 1-800-225-3108
Monday – Friday | 7:00 a.m. – 5:00 p.m. (Central Time)

© 2020 Woodmen of the World Life Insurance Society
Omaha, Nebraska

This is a solicitation of insurance and an agent may contact you.

Securities are offered through Woodmen Financial Services, Inc., 1700 Farnam Street, Omaha, NE 68102, member FINRA/SIPC, a wholly owned subsidiary of Woodmen of the World Life Insurance Society (collectively “WoodmenLife”). Securities other than the WoodmenLife Variable Annuity are issued by companies that are not affiliated with Woodmen of the World Life Insurance Society.

Benefits are available to members. An individual becomes a member by joining our shared commitment to family, community and country, and by purchasing a WoodmenLife product. These fraternal benefits are not contractual, are subject to change and have specific eligibility requirements.

Some fraternal benefits include additional membership requirements including length of membership, number of qualifying members in household and/or a qualifying event.

Check out the background of Woodmen Financial Services, Inc. on FINRA’s BrokerCheck.

Business Continuity Plan | Products are not available in New York and all products may not be available in all states. | Not all Representatives are licensed to sell all products.

Fraud, Ethics and EEO Reporting Hotline: 1-844-339-3053

A+ Financial Rating

This company was issued a A+ (Superior) rating by the A.M. Best Company, click for additional details. WoodmenLife has been awarded a rating of A+ (Superior), the second highest ranking out of 15, for its financial strength and operating performance in 2020 by A.M. Best, an independent rating company that is nationally recognized for its objective reporting and rating of insurers.

International Use

This Site is not intended for access outside of the United States, including those individuals who reside in the European Economic Area (“EEA”). WoodmenLife makes no representation that materials on the Site are appropriate or available for use in locations outside of the United States, and accessing them from territories where their contents are illegal is prohibited. Those who choose to access the Site from outside of the United States do so on their own initiative and are responsible for compliance with local laws.