Get answers to frequently asked questions
Connecticut’s new state-sponsored retirement savings program is open right now. It was created to help the 600,000 private-sector employees without access to employer-sponsored retirement plans. We understand you’ll have questions. Here are the answers to some frequently asked questions. If you have additional questions, we’re here to help.
- Account Access
- Contributions
- Eligibility
- Employer Registration
- Fees and Costs
- General
- Investments
- Linking Bank Accounts
- Saver's Credit
- Security
- Self-enrollment
- Tax Forms
- Withdrawals
- Is there a limit to how much I can contribute?
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Yes, contribution limits for IRAs are set by the federal government. For 2024, you can save up to $7,000 per year if you’re younger than 50 and $8,000 per year if you’re 50 or older, as long as you have earned at least that much. If you are contributing to a Roth IRA, you also need to meet certain income levels based on your modified adjusted gross income (MAGI). This contribution limit applies across all IRAs you may have (both Traditional IRAs and Roth IRAs with the State and elsewhere).
- Is there a maximum percentage of income that can be contributed?
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There is no upper limit on the percentage of income that can be contributed; however, IRAs have annual contribution limits. Roth IRA contributions may be further limited by your income if it is above certain limits. Your contributions are made post-tax, and your employer can’t deduct more than the amount of your available pay after the employer has made any other payroll deductions that have higher preference as required by law.
- Can I make withdrawals if I work during my retirement?
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Yes, you can make withdrawals from your account at any time. Consider whether a withdrawal from MyCTSavings is really your best option. You may want to consult with a tax expert.
- Are there additional withdrawal restrictions beyond normal Roth IRA restrictions?
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The only withdrawal restrictions for MyCTSavings IRAs are those set by the federal government for any Roth or Traditional IRA. Please consult a tax expert or financial advisor about your circumstances.
- Can I transfer my MyCTSavings money into another retirement savings account?
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Money in your Roth IRA can be transferred or rolled into another Roth IRA only. You should consult with a tax expert or financial advisor first.
- Can I take money from my MyCTSavings account?
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You can take money out of your Roth IRA at any time. There is no fee or penalty for withdrawing the contributions you make. However, investment earnings are subject to taxation and an additional penalty if taken out before you reach age 59½. There are penalties if you withdraw funds before you’ve had your first Roth IRA for five years. There are exceptions though. For example, if you’re a first-time homebuyer and your Roth IRA withdrawal may be tax-free if you have met the five-year requirement. Taking early withdrawals from Traditional IRAs may also be subject to income tax and penalty. That said, if you’re unsure about your status, it’s best to consult with a tax expert or financial advisor.
- Is there an administrative fee or penalty for withdrawing my money?
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There is no administrative fee or penalty for withdrawing the money you put into your Roth IRA. That’s your money and you already paid taxes on it. The interest your money has earned is taxable and possibly subject to a 10% penalty if withdrawn before you are age 59½. For a Traditional IRA, withdrawals may also be subject to income tax and early withdrawal penalty. Please consult with a tax expert or financial advisor to determine what steps and restrictions may apply to you.
- Is there a minimum retirement age for MyCTSavings?
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There is no minimum retirement age associated with the program. There is a federal tax penalty for withdrawing any investment earnings from a Roth IRA before age 59½, unless it’s for a qualifying reason. Please consult with a tax expert or financial advisor.
- Is there a waiting period before I can withdraw my money?
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You can take your money out of your Roth IRA at any time.
- Will Connecticut state income tax be withheld from my Roth IRA withdrawals?
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If you are a resident in the state, Connecticut income tax withholding applies only to the taxable portion of IRA distributions. Therefore, if your withdrawal is a qualified distribution there will be no income tax withheld. If your withdrawal is not a qualified distribution, then a minimum of 6.99% of the taxable portion (the earnings) will be withheld in the state of Connecticut, but you may claim an exemption from withholding, if eligible, or you may elect to have an additional amount withheld, by completing and submitting a Form CT-W4P.