Masonry Magazine May 1975 Page. 24
THE INDIVIDUAL RETIREMENT ACCOUNT (IRA)
MEANS TAX SHELTERED RETIREMENT PLANS
Coordinated by: Modern America Corporation
The March, 1975, issue of Masonry briefed MCAA members on the pension and profit sharing services now available through Modern American Corporation, an affiliate of CNA/insurance.
WHAT DOES THIS MEAN TO YOU?
Tax free dollars for Retirement! That's what it means to you!
Here's how the new Pension Law can help you provided you are not currently participating in a tax qualified retirement plan, a tax sheltered annuity, or a government-sponsored pension program.
Effective for tax years beginning January 1, 1975, Congress enacted and President Ford signed into law the "Employee Retirement Income Security Act of 1974." This new law allows any self-employed individual or any wage earner not currently covered by a retirement plan to set up his own personal retirement plan and receive important tax benefits. You are permitted to:
1. Contribute up to 15% of your compensation (earned income) into your own personal retirement plan each year and deduct up to 100% of this amount from your gross income, even if you take the standard allowable deductions on your income tax return. The maximum deduction is $1,500 in any tax year.
2. The new law allows both husband and wife to set up separate plans. Thus, if each spouse has earned income, each may deduct up to $1,500 for a contribution made to his or her plan for a total of up to $3,000. (Community property rules do not apply in figuring this amount.)
3. Any earnings of your personal retirement plan accumulate tax-free each year.
4. Distribution can be secured from your personal retirement plan, without any tax penalty, after age 59-12, but distribution must begin by age 70-12.
5. Employers and/or employees may elect to establish programs in their own behalf.
Why was this new Individual Retirement Account legislation brought about? Congress recognized there are millions of self-employed individuals and wage earners not covered under any retirement plan. If these people had wanted to save for retirement security, they would have had to do so with "after tax" dollars; therefore our Congress decided to give everybody an opportunity to utilize "pre-tax" dollars in planning for retirement.
Currently only about 15% of those attaining age 65 in the United States are financially independent. Last year some 17 million "retired" people either had to continue working for a living or else became dependent upon others, such as their family or some charitable institution. Now your Congress has provided a tax incentive for all citizens of the United States to take the necessary steps to accumulate a retirement fund that can help older persons maintain self-dignity and peace of mind once their working years are over.
The above are only some of the features of the new law. Examination of existing plans (if you have one) is also in order, but there is no intention to disrupt what is already in force and working for you.
For more information on the Individual Retirement Account, just call or write to the Modern America Corporation, 6250 LBJ Freeway, Dallas, Texas 75240 (telephone toll-free 800-527-2360).
masonry
May, 1975