Financial planning

* Contributions to a traditional retirement account may be tax deductible in the contribution year, with current income tax due at withdrawal. Withdrawals prior to age 59 ½ may result in a 10% IRS penalty tax in addition to current income tax.

** Qualified withdrawals of earnings from Roth accounts are tax-free. Withdrawals of earnings prior to age 59 ½ or prior to the account being opened for 5 years, whichever is later, may result in a 10% IRS penalty tax. Limitations and restrictions may apply. Qualified withdrawals from 529 Plans and Coverdell ESAs are federally tax free. Tax treatment at the state level may vary. Please consult with your tax advisor before investing. Municipal bonds are federally tax-free but other state and local taxes may apply. If sold prior to maturity, capital gains tax could apply.

*** Cash value of Life Insurance will grow generally income tax free assuming the policy is not a Modified Endowment Contract (MEC) and can be accessed during lifetime income tax free utilizing loans and withdrawals up to basis. However, if the policy is cash surrendered or lapses due to non payment of premiums during the insured’s lifetime, ordinary income taxes must be paid on accumlated cash value above the cost basis of the policy. Death proceeds are typically income tax free.