Individual Retirement Accounts (IRAs)
- Potential tax advantages and tax-free retirement earnings*
- Competitive rates well above average savings account rates
- Traditional and Roth IRA options available
- No set-up fees
- No account maintenance fees
- Contribution limit of $5,500 per year
- Extra $1,000 annual "catch-up" contribution allowed for ages 50+
- $1000 minimum deposit to open
*Consult a tax professional
Traditional Roth vs. Roth IRA
What's the difference between a traditional and Roth IRA? Both IRAs may provide tax incentives. Traditional IRAs are tax-deferred, meaning contributions are only taxed at the time of withdrawal. The amount you contribute may be deductible from that year's income tax.
Roth IRAs are tax-exempt. However, you still pay your income taxes in full, regardless of contribution level. Consult a tax advisor to see which IRA is right for you.
- No income limits to open
- No minimum contribution in any year allowing flexibility
- Contributions are tax deductible on state and federal income tax*
- Earnings are tax deferred until withdrawal (when usually in lower tax bracket)
- Withdrawals can begin at age 59½
- Early withdrawals subject to penalty**
- Mandatory withdrawals at age 70½
- Adjusted gross income must be less than $135,000 to contribute ($199,000 for joint filers)***
- Contributions are NOT tax deductible
- Earnings are 100% tax free at withdrawal*
- No mandatory distribution age
- No 70½ age limit on making contributions as long as you have earned income
*Subject to some minimal conditions.
**Certain exceptions apply, such as healthcare, purchasing first home, etc.
***As of 2018; IRS may change figure annually.