The New York City Employee IRA

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There are many advantages to establishing a NYCE IRA including: 

• Contributions:  Continue making contributions while you are still working or after you leave City service.  As long as you receive taxable compensation, even after you retire or leave City service, you are eligible to contribute to the Traditional NYCE IRA.  There is no age limit for making contributions to the Roth NYCE IRA. 

• Consolidation:  Consolidate all of your retirement plan accounts into the NYCE IRA.  Simply move your retirement accounts such as your retail IRAs, and previous employer plans (457, 401(k), 403(b) etc.) to the Traditional NYCE IRA.  The Roth NYCE IRA accepts rollovers from Roth 401(k) plans and other retail Roth IRAs.  The NYCE IRA offers you a great place to consolidate your retirement plan assets.  

• Deposit of Tax Refund:  You can arrange to have a portion of your federal income tax refund deposited into your NYCE IRA account. 

• Investment Options:  The NYCE IRA has the same low management fee investment options, including pre-arranged portfolios, as the NYC Deferred Compensation Plan.   

• Accessibility:  The NYCE IRA gives you unrestricted access to your money.  

• Defer Taxes and Avoid Penalties:  Rolling over to the NYCE IRA defers the taxes of a deferred compensation plan distribution and avoids penalties.  

• Tax Flexibility:  With the Traditional NYCE IRA, you can choose not to pay taxes when you withdraw, but when they're due.  By law, 20% of a 401(k), 457, or 403(b) withdrawal is retained for federal taxes.  Qualified Distributions from the Roth NYCE IRA account are not subject to federal, state or local taxes.  

• Estate Planning Flexibility:  As a "stretch" IRA, it is ideal for leaving rolled-over 457 and 401(k) assets to your spouse or other Eligible Designated Beneficiary, with required withdrawals and taxes spread out over their lifetime.  
• Spousal IRA:  Spouses can take advantage of the low cost investment options offered through the Deferred Compensation Plan by establishing a Spousal NYCE IRA.