* APY means Annual Percentage Yield. Rates are subject to change without notice. Rates are fixed for the term of the CDs. There is a substantial penalty for early withdrawal of principal. You must maintain the minimum deposit amount in the account each day to earn the disclosed APY. ** The original term on the short term CDs can be selected by you between the range listed and you will be paid the corresponding rate. After the first term, the account will automatically renew for 90 days and will earn the 90-day CD rate. Interest is paid only at maturity. *** Deposits in a minimum amount of $100.00 may be added to these accounts without extending the maturity. There is a one time per term option to request a rate change without extending the maturity.
Which Individual Retirement Account |
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| Traditional IRA Under Age 50 | |||
| Traditional IRA Age 50 or Over But Under Age 70 1/2 | |||
| Roth IRA Under Age 50 | |||
| Roth IRA Age 50 or Over |
* * Cost of living adjustment (COLA) applies only to $5,000 contribution limit as above, not to the extra $1,000 contribution limit that is available to individuals age 50 or older.
When can I contribute to an IRA?
An IRA may be opened for the taxable year and funded any time between January 1 and the date your tax return is due for the year, excluding extensions. This date is normally April 15th of the following year.
Are contributions deductible?
Contributions may or may not be deductible, depending on whether or not you or your spouse are an active participant in an employer-maintained retirement plan. You may want to consult your tax advisor or speak to one of our IRA trustees for more information on deductibility. (You can still make non deductible contributions to your traditional IRA or may be eligible to make Roth IRA contributions.) Check brochure available in our office.
Are the earnings taxable?
All earnings on deductible and/or nondeductible funds are tax deferred until withdrawals are made from the account.
When can funds be withdrawn without incurring IRS penalties?
The 10 percent IRS premature-distribution penalty does not apply any time after you reach age 59 ½. This penalty can also be avoided before age 59 ½ if you become disabled or die, if the distributions are part of certain periodic payments, for medical expenses in excess of 7.5 percent or your adjusted gross income, for health care insurance if you've been receiving unemployment compensation for at least 12 weeks, for qualified higher education expenses, or for a first-time home purchase. Note: When you reach age 70 ½, you must begin required minimum distributions from your traditional IRA or severe penalties will be imposed.
What happens in the event of death?
The named beneficiary(ies) will receive the entire proceeds of the IRA. The beneficiary(ies) are not subject to CD maturity penalties or the IRS 10 percent premature-distribution penalty. The manner of distribution is determined by the elections made by you or your beneficiary(ies) within the guidelines of the law.
Roth IRA
What is a Roth IRA?
A Roth IRA is an account that accepts non-deductible contributions for retirement savings that features tax-free withdrawals for certain distribution reasons after a five-year holding period.
Who is eligible to have a Roth IRA?
You must have earned income (or your spouse must have earned income) and your modified adjusted gross income (MAGI) cannot exceed certain limits. (see brochure in our office)
How much can be contributed?
See Contribution Rules for Traditional IRA's
Are earnings taxable?
Provided the earnings are taken as part of a qualified distribution, there are no taxes. A qualified distribution must meet a five-year holding period which begins with the tax year for which the first contribution is made. After that, any earnings withdrawn for qualified distribution reasons are tax-free and IRS penalty free. These qualified distributions include:
· Distributions made on or after the date on which you attain age 59 ½, · Distributions made to your beneficiary (or your estate) upon your death, · Distributions attributable to your being disabled, and · Qualified first-time homebuyer distributions (up to $10,000).
What about distributions prior to age 59 ½?
The 10% IRS penalty does not apply to earnings withdrawn when you take any of the qualified distributions listed above. The 10% penalty is also waived for certain other distribution reasons. But, for these distributions, taxes on any earnings will apply. Distributions that are subject to taxes on earnings but have no penalty include:
· Substantially equal periodic payments, · Eligible medical expenses in excess of 7.5% of your adjusted gross income, · Medical insurance premiums for eligible unemployed individuals, · Qualified education expenses, and · Distributions taken within the first five years for any of these reasons: age 59 ½, death, disability, or first-time home purchase.
Can I get money before my retirement?
For Roth non-qualified distributions, original contribution amounts are returned first. Contributions (as opposed to earnings) are not subject to taxation or the 10 percent IRS premature-distribution penalty. In other words, you can always get back your principal tax free and IRS penalty free for any reason.
When do I have to start taking distributions from my Roth IRA?
You never have to take distributions from you Roth IRA. Assets are not subject to age 70 ½ required minimum distributions.
Can funds be moved to or from a workplace qualified plan or other IRA at another financial institution?
Traditional and Roth IRAs can be moved by transfer or rollover. Our IRA Trustees will be happy to explain the difference between a transfer and rollover. Transfers are non-reportable transactions. Rollovers, however, must be reported and funds must be rolled over within 60 calendar days of receipt. The same funds may be rolled over only one time per year.
If you are retiring or changing jobs and anticipate withdrawing money from your employer's retirement plan, 401K or other qualified plan, you may want to arrange for a "direct rollover" into a new IRA account. A direct rollover eliminates the IRS mandatory 20% withholding.
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