IRA rules change frequently. To stay informed, explore our list of frequently asked questions.
This information is being provided as general information and is not intended to be legal, financial, or tax advice. Lord Abbett does not provide legal or tax advice. Some of this information may be quite complex, and we strongly suggest you consult with your advisor or tax professional based on your individual situation.
Required minimum distributions (“RMDs”) must begin by April 1 of the calendar year following the calendar year in which you attain the applicable age, as follows:
The Saver’s Credit is a nonrefundable federal income tax credit available to taxpayers with adjusted gross income (AGI) less than $76,500 for couples filing jointly (for other filers, see table below). The maximum annual contribution eligible for the credit is $2,000 ($4,000 if married filing jointly), and the maximum credit is 50%, making the maximum credit $1,000 ($2,000 if married filing jointly).
2025 Saver’s Credit Eligibility
You may be eligible to receive a tax credit for funding your traditional or Roth IRA. The Saver’s Credit is a nonrefundable federal income tax credit available to taxpayers with adjusted gross income (AGI) that does not exceed certain limits, as illustrated in the chart below. The maximum annual contribution eligible for the credit is $2,000 ($4,000 if married and filing a joint tax return) and the maximum credit is 50%, making the maximum credit $1,000. ($2,000 if married and filing jointly).
Tax Credit %1 | 50% | 20% | 10% | Ineligible for Credit |
Married filing jointly | Not to exceed $47,500 | $47,501 - $51,000 | $51,001 - $79,000 | Greater than $79,000 |
Head of household | Not to exceed $35,625 | $35,626 - $38,250 | $38,251 - $59,250 | Greater than $59,250 |
Single | Not to exceed $23,750 | $23,751 - $25,500 | $25,501 - $39,500 | Greater than $39,500 |
*Income based on adjusted gross income (AGI).
Individuals age 70½ or older can make a qualified charitable distribution (QCD) up to $108,000 annually from their traditional IRA, inactive SEP, or SIMPLE IRA, and have the proceeds sent directly to a qualifying charity. A QCD is not subject to income tax; however, the owner does not receive a tax deduction. Furthermore, the donation can satisfy an investor’s annual required minimum distribution.
QCDs are not permitted from employer-sponsored retirement plans (i.e., 401(k)). In addition, individuals age 70 ½ or older may also elect a one-time distribution of $54,000 to be paid directly to the trustee of a charitable gift annuity, charitable remainder unitrust, or a charitable remainder annuity trust.
Eligible assets may be sent directly to a Lord Abbett IRA from a 401(k) plan, profit-sharing plan, 403(b) plan, governmental 457(b) plan, or another IRA.
To transfer your account from a 401(k) plan or another workplace retirement plan to a Lord Abbett IRA:
An IRA transfer occurs when an investor moves his or her IRA from one institution to another.
You may have retirement funds sent directly to Lord Abbett from your prior IRA custodian. Alternatively, if you take receipt of the assets, you generally have 60 days to deposit the funds into a new IRA or be subject to taxation and a potential penalty.
For more information on how to transfer your retirement assets to Lord Abbett, please call our retirement specialists at 888-522-2388. Any decision to transfer or roll over your retirement assets to a Lord Abbett IRA must be made by you and your advisors independent of Lord Abbett and its representatives.
This information is being provided as general information and is not intended to be legal, financial, or tax advice. Lord Abbett does not provide legal or tax advice.
Adjusted Gross Income includes wages, interest, capital gains, income from retirement accounts, and alimony paid to the taxpayer, adjusted downward by specific deductions (including contributions to deductible retirement accounts and alimony paid by the taxpayer), but not including standard and itemized deductions.
Traditional IRA contributions, plus earnings, interest, dividends, and capital gains, may compound tax-deferred until you withdraw them as retirement income. Amounts withdrawn from traditional IRA plans are generally included as taxable income in the year received and may be subject to 10% federal tax penalties if withdrawn prior to age 59½ unless an exception applies.
A ROTH IRA is a tax-deferred and potentially tax-free retirement account available to working individuals and their spouses who meet the annual IRS income requirements. Distributions, including accumulated earnings, are tax-free if the account has been held at least five years, and the individual is at least 59½, or if any of the IRS exceptions apply. Contributions to a Roth IRA are made with after-tax dollars.
SEP IRA (Simplified Employer Pension Plan) allows certain business owners and their employees to save for retirement. All contributions are made by the employer and are the same percentage of an eligible employee’s pay (up to a maximum of 25% of eligible compensation). Beginning January 1, 2023, employees may elect to have contributions made to their SEP IRA as Roth contributions, where the plan so permits.
A SIMPLE IRA allows small businesses to offer a retirement benefit that enables eligible employees to make pre-tax contributions while the employer makes matching or non-elective contributions. All contributions are made directly to a SIMPLE IRA established for each employee. SIMPLE IRA plans are maintained on a calendar-year basis. Beginning January 1, 2023, employees may elect to have contributions made to their SIMPLE IRA as Roth contributions, where the plan so permits.
A 401(K) Plan is a qualified retirement plan established by employers to which eligible employees may make salary deferral (salary reduction) contributions on an after-tax (Roth contributions) and/or pre-tax basis. Employers offering a 401(k) plan may make matching or non-elective contributions to the plan on behalf of eligible employees and may also add a profit-sharing feature to the plan. Earnings accrue on a tax-deferred basis.
A 403(b) PLAN is a retirement plan for certain employees of public schools and tax-exempt organizations and certain ministers. Generally, retirement income accounts can invest in either annuities or mutual funds. Also known as a tax-sheltered annuity (TSA) plan.
A 457(b) PLAN is a non-qualified, deferred-compensation plan established by state and local governments, tax-exempt governments, and tax-exempt employers. Eligible employees can make salary deferral contributions to the plan. Earnings accumulate on a tax-deferred basis, and contributions are not taxed until the assets are distributed from the plan.
Combining and consolidating assets in an IRA rollover may involve administrative fees and other charges.
There may be fees, expenses, taxes, and penalties associated with early IRA withdrawals.
Lord Abbett will waive (or otherwise pay) the yearly $10.00 custodial fee that would be charged each year on an ongoing basis to every new IRA account and therefore, will not assess a custodial account fee. Fund level fees and expenses are still applicable. Please see the current prospectus.
To comply with Treasury Department regulations, we inform you that, unless otherwise expressly indicated, any tax information contained herein is not intended or written to be used, and cannot be used, for the purpose of (i) avoiding penalties that may be imposed under the Internal Revenue Code or any other applicable tax law, or (ii) promoting, marketing, or recommending to another party any transaction, arrangement, or other matter.