What does EIAP mean in UNCLASSIFIED

An EIAP allows contributions up to certain limits, set by the Internal Revenue Service each year. Contributions made to an EIAP are typically put into investments such as stocks, bonds, and mutual funds. These investments grow tax-deferred until retirement age when the investor begins taking distributions from the account.

The primary benefit of using an EIAP is reducing one's taxable income. Contributions made to the account reduce one's taxable income for the year which can result in substantial savings over time. Furthermore, interest earned on investment within an Eligible Individual Account Plan grows tax-free until withdrawal at retirement age.

Yes, there are annual contribution limits set by the Internal Revenue Service (IRS). Individuals can contribute up to ,000 in 2019 and ,000 if they are over 50 years old. Those who make more than this can contribute additional amounts up to certain limits but these contributions may be subject to annual taxes and penalties depending on their filing status with the IRS.

Yes, withdrawals taken from a EIAP before reaching retirement age may be subject to taxes and penalties depending on your filing status with the IRS. Furthermore, once you reach age 70 1/2 you must begin taking required minimum distributions from your account each year which could lead to additional taxation if withdrawn too soon or in excess of what is allowed by law.