Your money is always there if you need it.
Can I take out my money?
The simple answer: yes. But what funds you’re withdrawing, when you’re withdrawing them, and why will affect whether you’ll have to face any taxes or penalties on the amount withdrawn. That said, if you do need to take money from your account, you can simply make a withdrawal.
Your MyCTSavings account is a Roth IRA and is designed to help you save for retirement over the long term, but we understand that each person’s situation is different. It’s your money, after all, and you can manage your account as you like.
What if I withdraw money?
If you choose to withdraw money from your MyCTSavings account, you could incur penalties and owe taxes.
Although you can withdraw your contributions at any time without taxes or penalties, the earnings on your contributions are treated differently. If you take money out of your account and you don't meet the IRS criteria for a “qualified” distribution, you will need to include the earnings in your income for the tax year. If you withdraw money from your account before you turn age 59½ by requesting a “nonqualified” distribution, you’ll pay a 10% penalty on the earnings portion of your distribution. You may wish to consult with your tax advisor to be sure you understand the impact of any withdrawals you make.
Why is saving now so important?
When it’s time to retire, for many of us, Social Security benefit payments won’t be enough. In fact, when the Social Security program was created, it was never meant to be one’s only source of retirement income.1 The average monthly Social Security benefit in 2022 is $1,657 ($19,884 per year).2 To help make ends meet and supplement any benefit payments you receive, it’s important to save early in a retirement savings program like MyCTSavings.
Can I move my money to another IRA?
Yes. You can transfer funds in your MyCTSavings account to another IRA you own without incurring a penalty or paying taxes, as long as the transfer takes place between the accounts. Just remember that the IRS lets you make only one rollover in a 12-month period and this limit applies to all IRA types (both Traditional and Roth).
Still have questions? We’ve got answers in our FAQs.
1. What is the maximum Social Security benefit? AARP. https://www.aarp.org/retirement/social-security/questions-answers/maximum-ss-benefit.html.
2. Bieber, C. (2022, January 17). Why Is 2022's Average Social Security Benefit Lower Than You Might Expect? The Motley Fool. https://www.fool.com/investing/2022/01/17/why-is-2022-average-social-security-benefit-so-low.