Restore Glisten with an IRA
Don’t Let a Rocky Housing Market Tarnish Your Golden Years

Home equity has traditionally played a significant role in retirement. Older Americans often use their home equity to finance large expenses and as a safety net for unexpected costs. Others plan to sell their homes and downsize to cash out some equity or pay for a move to an assisted living facility or retirement community. A home is often an older person’s most valuable asset.

But the housing crisis hit the senior population hard, and now many retirees won’t be able to rely on their home equity for financial support. A survey by AARP found that as of December 2011, 16% of mortgages of the 50+ population were underwater — meaning homeowners owe more than their home is worth, so they have no equity. Delinquent and foreclosed mortgages of homeowners age 50+ skyrocketed from 2007 to 2011.*

If your future financial security in retirement has been harmed by the downturn in the housing market, it’s time to rev up your retirement savings. An individual retirement account (IRA) can help. The tax advantages of an IRA help you build a nest egg faster. You can contribute up to $5,000 for 2012 and $5,500 for 2013 to a traditional or Roth IRA, or any combination of the two. If you’re 50 or older, you’re eligible to make “catch-up” contributions of an additional $1,000 per year.**

The tax-deferred growth of an IRA means you won’t have to pay taxes on the account’s earnings each year as they accumulate.*** That allows an IRA to grow faster than a taxable account earning the same return.

To learn more about how an IRA can help you enjoy financial security during your golden years, or to open an account, stop in to your local Chemical Bank office, contact our Wealth Management Department at 800.808.5404 or visit

* Source: “Nightmare on Main Street: Older Americans and the Mortgage Market Crisis,” July 2012,
** These are the limits for 2012 and 2013, respectively. The limit is indexed to inflation for future years. Maximum contribution for those age 50+ is $6,000 in 2012 and $6,500 in 2013, or your taxable compensation for the year, whichever is less. Non-wage-earning spouses of wage earners may also contribute to an IRA.
*** Taxes will be due at ordinary income tax rates upon withdrawal after age 59½ from a traditional IRA. Withdrawals from a Roth IRA are tax-free if the account holder is at least age 59½ and has held the account for at least five years. Premature withdrawals from both types of IRAs may be subject to ordinary income tax and a 10% tax penalty.