IRA

/IRA
IRA2018-08-21T14:59:00+00:00

Individual Retirement Accounts

retired couple relaxing

The key to building a retirement nest egg is to begin early and to contribute annually. Individual Retirement Accounts (IRAs) can also offer some tax advantages. You will earn the same competitive interest rates as our CD rates!

IRA Account Features:

  • Interest bearing
  • Terms available for CDs are from 3 months to 5 years.
  • Liquid savings accounts available
  • Maximize your retirement while minimizing your taxes (Consult your tax advisor)

IRA Accounts Include:

A Traditional IRA is a retirement savings account that provides federally tax-deferred growth. Withdrawals after the age of 59 ½ are taxed at your tax rate at that time. Contributions may be tax deductible.

Consult your tax advisor for advice on deductibility in your situation.
A Roth IRA is an individual retirement account allowing a person to set aside after-tax income up to a specified amount each year. Both earnings on the account and withdrawals after age 59½ are tax-free. Customers should consult their tax advisors regarding the IRA type appropriate to their individual situation.

Consult your tax advisor for advice on deductibility in your situation.

A SEP IRA is for the self-employed and businesses with few employees. It is best for employers who want flexibility in the amounts they contribute annually and want a simple, easy to administer, low cost plan with no complicated tax filings.

Consult your tax advisor for advice on deductibility in your situation.

A Rollover IRA is a retirement account specifically designed to receive transfers from a previous employer sponsored retirement plan, such as a 401(k) or 403(b). By rolling over this account directly:

  • You can consolidate your retirement accounts for simplified management and greater control
  • You get a wider variety of investment choices
  • You maintain the tax deferred status of your retirement savings while allowing them the opportunity to grow
Consult your tax advisor for advice on deductibility in your situation.

The Coverdell Educational Savings Account is a great way to save for your child’s educational expenses.  The earnings in the account grow tax-free as long as the distributions are used for qualified educational expenses.  Any individual can contribute $2,000 a year to a Coverdell ESA for the benefit of any person under age 18.  Funds must be used by the time the beneficiary turns 30 years old. However, the account can be transferred to a relative (including cousins, step-relatives, and in-laws).

Consult your tax advisor for advice on deductibility in your situation.

To participate in a Simple IRA, your employer must first offer the plan. Your employer must have fewer than or equal to 100 employees that received $5,000 or more in compensation in the prior year. The second rule is that the employer cannot offer another qualified plan, such as a 401k.

Employees wishing to participate in their employer’s Simple IRA plan must have received at least $5,000 in compensation in the past two years and be expected to receive at least $5,000 in the current year.

A Simple IRA is a great plan for business owners who want employees to be able to contribute to their retirement.

It allows you to save pre-tax dollars* for qualified medical expenses. With no “use it or lose it” stipulations, you will benefit from the affordability, portability and ownership our HSA has to offer. HSA Account Features:

*Contact your tax advisor for specific information on the acceptable use of the HSA for qualified medial expenses.
Traditiona IRA Roth IRA Rollover IRA SEP IRA
Description Defer taxes on earnings Earnings are tax-free More retirement funds from an employer-sponsored plan to an IRA A retirement plan option for self employed individuals of business owners with employees
Are contributions deductible? Depends on your income and access to an employer-sponsored plan No Typically contains funds from another tax-advantaged plan (without additional contributions) Contributions are tax-deductible for the business, up to 20% of modified net earnings (self-employed) or 25% of salary (employees)
Do I pay taxes on withdrawals? Yes, pre-tax contributions and earnings are subject to tax No if you are making qualified withdrawals Yes Yes, pre-tax contributions and earnings are subject to tax
What is my maximum annual contribution? For tax year 2013, lesser of your earned income or $5,500 if younger than age 50 and $6,500 if 50 or older in the corresponding tax year For tax year 2013, lesser of your earned income or $5,500 if younger than age 50 and $6,500 if 50 or older in the corresponding tax year No annual contribution allowed Contributions an employer can make for 2013 to each emplyee’s IRA cannot exceed the lesser, $51,000 or 25% of pay
Who can invest? Anyone younger than 70 with earned income or a spouse with earned income Depends on income, no age limits Anyone with an eligible rollover distribution Are self-employed individuals or business owners with employees that meet requirements
Are withdrawals required Yes, starting at age 70 1/2
No Yes, starting at age 70 1/2 Yes, starting at age 70 1/2
Coverdell ESA Simple IRA HSA Serious Saver
Description A savings account for qualified educational expenses For self-employed individuals and business owners with up to 10 employees A Health Savings Account (HSA) is the perfect way to pay for qualified medical expenses for an HSA owner and his/her family on a tax-free basis
Are contributions deductible? No

Contributions not allowed after the beneficiary reaches age 18 (except for special needs beneficiaries)

The funds contributed to an account are not subject to federal income tax at the time of deposit
Do I pay taxes on withdrawals? Withdrawals for certain qualified education expenses are tax-free
Yes, a withdrawal is taxable in the year it is received. A larger tax is imposed if the withdrawal occurs in the first 2 years of partcicpation HSA participants do not have to obtain advance approval from their HSA trustee or their medical insurer to withdrawal funds, and the funds are not subject to income taxation if made for qualified medical expenses
What is my maximum annual contribution? $2,000 per child

Limit apples to all Coverdell Education Savings Accounts (ESA) for the same child

The amount the employee contibutes to a SIMPLE IRA cannot exceed $12,000 in 2013. If permitted by the SIMPLE IRA plan, participants who are age 50 or over at the end of the calendar year can also make catch-up contributions For 2013 the contribution limit is $3,250 for single and $6,450 for family
Who can invest? Anyone who has MAGI*

-Single filer: up to $95,000

-Joint filers: up to $190,000

Anyone who works for an employer that offers SIMPLE IRA A Health Savings Account (HSA) is available to taxpayers in the U.S. who are enrolled in a High-Deductible Health Plan (HDHP)
Are withdrawals required No
Yes, starting at age 70 1/2
No
*MAGI: Modified Adjusted Gross Income from the federal tax form
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If you have any questions about our IRA Accounts, please contact us today.
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