Individual Retirement Account (IRA) Details
Requirements
$500 minimum opening deposit on most terms
Service Charge
- No setup fees
- No monthly or annual maintenance fees
Interest & Tax Savings
Tax-advantaged savings*
Other Features
- Competitive interest above standard savings rates
- Traditional and Roth IRA options
- $6000 contribution limit per year, $7000 if you are 50 or older.
- Funds can be used to purchase CDs within IRA
- Variety of IRA terms ranging from 1 year to 5 years
- Depositors are FDIC insured up to the maximum allowed by law
*Consult a tax advisor.
Traditional vs. Roth
There are advantages to both Traditional and Roth IRAs. One of the biggest differences is the time at which you see the most advantage. A Traditional IRA provides potential tax relief today, while a Roth IRA has the potential for the most tax benefit at time of retirement.
Traditional IRA
Income Limits
No income limits to open
Contributions
No minimum contribution requirement
Tax Implications
- Contributions are tax deductible on state and federal income tax*
- Earnings are tax-deferred until withdrawal (when usually in lower tax bracket)
Distribution
- Withdrawals can begin at age 59 ½
- Early withdrawals subject to penalty**
- Mandatory withdrawals at age 70 ½
Roth IRA
Income Limits
Income limits to be eligible to open Roth IRA***
Contributions
- Principal contributions can be withdrawn without penalty*
- No age limit on making contributions as long as you have earned income
Tax Implications
- Contributions are NOT tax-deductible
- Earnings are 100% tax free at withdrawal*
Distribution
- Withdrawals on interest can begin at age 59 ½
- Early withdrawals on interest subject to penalty**
- No mandatory distribution age
*Subject to some minimal conditions. Consult a tax advisor.
**Certain exceptions apply, such as healthcare, purchasing first home, etc.
***Consult a tax advisor.