Everyone jokes about retiring early and wealthy. While we can’t promise either, we can help you get started in the right direction with an Individual Retirement Account (IRA). Better than a simple savings account or other ways of investing, an IRA can also mean great tax advantages so you can put and keep more money in your pocket.
To help you save for retirement, we offer several types of IRA accounts. While each has specific advantages, the main benefit of an IRA is that you might be able to avoid paying taxes on the interest you earn until you withdraw your money. This helps your savings grow faster. You may also save money on taxes, too. Because by the time you’re ready to spend the money in your account (at retirement), you may be in a lower tax bracket than when you invested the money.
Whether you’re just collecting your first paycheck or nearly ready to begin enjoying your retirement, we can help.
Our first piece of advice: only invest in an IRA if you are sure you will not need to withdraw your money early (in most cases, early means within 5 years of opening your account or before you are 59 ½) because the IRS penalties can be expensive.
Traditional IRA Roth IRA Education IRA/Coverdell ESA Designed for People who expect to be in a lower tax bracket once they retire People who expect to be in the same or higher tax bracket when they retire People who want to help pay for the educational expenses of someone under the age of 18 Eligibility You must be under the age of 70 ½ and still collecting a paycheck Any age, and still earning a paycheck Anyone can contribute; the beneficiary must be under the age of 18 Tax features Contributions are made with pre-tax dollars; your account grows tax-deferred Contributions are made with after-tax dollars; your account grows tax-deferred; if you quality, withdrawals may be tax free too Your account grows tax-free; no tax on earnings used for eligible education expenses; may be used to pay for elementary or secondary school Annual Contribution Limit $5,500; $6500 if over 59 $5,500; $6,500 if over 59 Up to $2,000, depending on your annual earnings Other considerations Can’t make contributions to this account once you are over age 70 ½ Can be used for estate planning and offers the benefit of tax-free income to your heirs Beneficiary must use funds by age 30; account can be transferred to relative
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Pay less in taxes, save more for you
No fees to start investing
You can open an account with as little at $25
We have several types to choose from
Q Why open an IRA?An IRA is a tax-advantaged way to save for your retirement. Putting money into an IRA can help you reach your retirement savings goals.
Q 401(k) or IRA?Most financial experts agree you should contribute the full amount possible to your 401(k), especially if your employer matches your contributions. Once you have maximized your 401(k), you should then consider opening an IRA.
Q What are the income limits?Traditional IRA: There are no income limits to contributing, but there are limits for tax-deductable contributions. Roth IRA: There are income limits. In 2013, taxpayers who file as single can make a full contribution to a Roth IRA if their income is less than $112,000. Or, you can make a partial contribution if your income is between $112,000–$127,000. If you are married and file jointly, you can make a full contribution to a Roth IRA if your income is less than $178,000 and a partial contribution if your income is between $178,8000–$188,000. These amounts are usually adjusted annually.
Q What are the contribution limits?If you are under the age of 50, you may contribute up to $5,500 or 100% of your earned income, if that is under $5,500. Once you reach age 50, catch up contributions let you invest up to $6,500.
Q What are my investment choices?Like all our services, we like to find the options that best suit you. Call or come into your local branch and we can talk through the investment choices.
Q How do I open an IRA?Come in to the bank and we’ll get your IRA account set up.