Individual Retirement Account (IRA)

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Summary

Plan for a Bright Financial Future

We know change can be tough — especially on your wallet. Whether you’re leaving a long career or sending your kid off to college, our IRA options and Coverdell Education Savings help soften those blows to your budget. Enjoy tax advantages* and dividends higher than regular savings on the funds you set aside today to cover tomorrow’s costs. No setup or maintenance fees mean you can put more toward your trip around the world or send sweeter care packages to aspiring alumni. Celebrate your special occasions in style — open an IRA today!

Account Features

  • Competitive dividends above standard savings rates
  • Tax-advantaged retirement savings*
  • Coverdell Educational Savings Account (ESA) also available
  • No setup fees
  • No monthly or annual maintenance fees
  • Funds can be used to purchase share certificates within IRA
  • $1 minimum deposit to open

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

  • No income limits to open
  • No minimum contribution requirement
  • Contributions are tax deductible on state and federal income tax*
  • Can contribute up to $5,500 for 2015 and 2016
  • Additional $1,000 "catch-up" contribution allowed for ages 50+
  • Earnings are tax deferred until withdrawn from IRA
  • Withdrawals can begin at age 59½
  • Early withdrawals subject to penalty**
  • Mandatory withdrawals at age 70½
  • Must be under age 70½ and have earned income (or file a joint tax return with a spouse who has earned income) in order to contribute to IRA

Roth IRA

  • Income limits to be eligible to open Roth IRA***
  • No minimum contribution requirement
  • Contributions are NOT tax deductible
  • Depending on MAGI, may be able to contribute up to $5,500 for 2015 and 2016.
  • Additional $1,000 "catch-up" contribution allowed for ages 50+
  • Earnings are 100% tax free at withdrawal*
  • Principal contributions can be withdrawn without penalty*
  • Withdrawals on interest can begin at age 59½
  • Early withdrawals on interest subject to penalty**
  • No mandatory distribution age
  • No age limit on making contributions as long as you have earned income (or file a joint tax return with a spouse who has earned income)

*Subject to some minimal conditions. Consult a tax advisor.

**Certain exceptions apply, such as healthcare, purchasing first home, etc. 

***Consult a tax advisor.

Coverdell ESA

Create an easier transition into college for yourself and your student by setting up a savings account early. A Coverdell Education Savings Account (ESA) provides a tax-free safe place to grow competitive dividends and also financial confidence for a new stage in life.

  • No setup or annual fee
  • No minimum deposit to open
  • Dividends grow tax-free
  • Withdrawals are tax-free and penalty-free when used for qualified education expenses*
  • Designated beneficiary must be under 18 when contributions are made
  • To contribute to an ESA, certain income limits apply**
  • Contributions are not tax deductible
  • $2,000 maximum annual contribution per child
  • The money must be withdrawn by the time the beneficiary turns 30***
  • ESA may be transferred without penalty to another eligible family member****
  • Age 18 and age 30 limits do not apply to special needs individuals

*Qualified expenses include tuition and fees, books, supplies, board, etc.

**Consult your tax advisor to determine your contribution limit.

***Those earnings are subject to income tax and a 10% penalty.

****Eligible family members include the child’s spouse, sibling, niece, nephew, parent, aunt, uncle, child, grandchild, in-law, or first cousin under the age of 30.

SEP Plans

Simplified Employee Pension plans (SEPs) can provide a significant source of income at retirement by allowing employers to set aside money in retirement accounts for themselves and their employees. SEPs are generally used for small businesses or self-employed persons.

  • No income limits to open
  • Contributions are eligible to be tax-deductible*
  • Earnings are tax deferred until withdrawal
  • Withdrawals can begin at age 59½
  • Early withdrawals subject to penalty**
  • Required minimum distributions begin at age 70½

*Subject to certain conditions. Consult a tax advisor.

**Certain exceptions apply. Consult a tax advisor.

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