Individual Retirement Account

Building a strong financial future begins with planning today.

Planning for Retirement

Retirement may seem far away, but it's never too early to determine how much you'll need and to begin the process of saving. Making smart financial decisions now can help impact how you live in retirement.

We can assist you along the way with our Individual Retirement Account (IRA)—it's designed to help you reach your retirement goals.

An IRA is a tax-deferred personal savings account that allows you to save for retirement without a company-sponsored plan. Throughout your lifetime, you can make tax-deductible contributions (subject to limitations) to your IRA, which you can then invest in basic securities such as stocks and bonds.

For 2024, the annual amount you can contribute to an IRA is the lesser of 100% of earned compensation or $7,000, or $8,000 if you are age 50 or older (as of December 31 of the tax year to which the contribution relates).

Traditional IRA

Tax-deferred retirement savings.

With a traditional IRA—the most common type of IRA—income taxes are deferred until you withdraw them, so you don't pay annual federal (and, in many cases, state) income taxes on your earnings.

At age 59½, you can make taxable withdrawals from the account called distributions for your retirement.

If you choose to take distributions before you turn age 59½, the government imposes a premature distribution penalty of 10% on your withdrawal.

Additionally, when you turn age 72, you are required to take distributions by April 1 of the following calendar year.

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Roth IRA Account

Tax-free qualified distributions.

Unlike the traditional IRA, contributions to the Roth IRA are considered after-tax and therefore not deductible, but you can generally take distributions from the Roth IRA tax-free.

The maximum annual contribution to the Roth IRA for 2024 is $7,000 or $8,000 for individuals age 50 and older (as of December 31 of the tax year to which the contribution relates).

The Roth IRA became an option after the Taxpayer Relief Act of 1997 and allows qualifying investors to make annual contributions toward retirement.

There is no mandatory age at which you are required to take distributions from a Roth IRA, and there is no premature distribution penalty for amounts withdrawn from principal, subject to certain requirements.

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Coverdell Education Savings Account (ESA)

Helping prepare for education expenses.

The Coverdell Education Savings Account, or Education IRA, is a trust created exclusively for the purpose of paying qualified education expenses.

You can contribute up to $2,000 per year to the account and those contributions will grow tax-free until distributed.

In addition, the beneficiary will not owe tax on distributions if they are less than the beneficiary's adjusted qualified education expenses at an eligible institution.

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Savings Incentive Match Plan for Employees (SIMPLE IRA)

A retirement plan for small businesses and self-employed individuals.

In this written salary reduction arrangement, eligible employees contribute to an IRA in their name. Employers are required to make annual contributions for each eligible participant.

This arrangement is available to self-employed individuals or owners of companies that have 100 or fewer employees and no qualified retirement plan.

Employees are eligible for a SIMPLE IRA if they earn at least $5,000 annually during any two of the preceding calendar years.

SIMPLE IRAs may be funded by annuities.

For 2020, the maximum employee contribution limit is the lesser of 100% of compensation or $13,500. SIMPLE IRA owners age 50 or older may be eligible to make an annual catch-up contribution of $3,000.

Money contributed to a SIMPLE IRA accumulates tax deferred until withdrawn. Withdrawals are subject to ordinary income tax and may be subject to penalties if taken before age 59½.

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